Study: CUs Have Earned 'Forgiveness'

WABAN, Mass.-U.S. credit unions have accumulated good will with consumers because they are steadfastly working on their members' behalf, and consumers are more willing to forgive credit unions when they make an honest mistake compared with banks, according to a Temkin Group Report.

Temkin Group, a customer experience research and consulting firm, said its 2012 Temkin Forgiveness Ratings rate how likely consumers are to forgive 206 large companies across 18 industries if they deliver a service miscue. This is the second year Temkin Group has published these ratings. The research, which is based on a survey of 10,000 U.S. consumers in January 2012, shows consumers are most likely to forgive USAA, credit unions, H.E.B., Hy-Vee, Dollar Rent A Car, Chick-fil-A, Publix, Costco and Amazon.com.

At the other end of the spectrum, consumers were least likely to forgive Citigroup, Charter Communications, HSBC, Chrysler dealers, EarthLink, Bank of America, Comcast, Quest and US Airways.

"Forgiveness is a valuable asset that you earn by consistently meeting customers' needs, but many companies don't have enough forgiveness stored up to recover from their miscues," said Bruce Temkin, author of the research and managing partner of Temkin Group.

The 2012 Temkin Forgiveness Ratings cover 18 industries: Airlines, appliance makers, auto dealers, financial institutions (banks and credit unions), car rental agencies, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, TV service providers and wireless carriers.

Temkin Group said grocery chains have earned the most forgiveness from consumers, followed by retailers, appliance makers and parcel delivery services. However, consumers are not very likely to forgive mistakes by credit card issuers, Internet service providers and TV service providers.

The research also examined how individual companies are rated, relative to their industry peers. Credit unions, USAA, Hyatt, US Cellular, Dollar Rent A Car, Chick-fil-A, and Bright House Networks were more than 15 percentage points above their industry averages.

Five companies fell 15 or more percentage points below their industry's average Temkin Forgiveness Ratings: Chrysler dealers, Citigroup, Travelers, Charter Communications and RadioShack.

Temkin Group analyzed changes in Temkin Forgiveness Ratings between 2011 and 2012 and found consumers are more forgiving this year than they were in 2011.

Sixty-eight of the 139 companies that were in the 2011 and 2012 Temkin Forgiveness Ratings earned double-digit improvements, and four companies improved by more than 25 percentage points: credit unions, TD Ameritrade, Lenovo and USAA.

Ten companies lost ground during the past year, with the biggest declines coming for Citigroup, Continental Airlines, Travelers, Sears, Holiday Inn Express and The Hartford.

For info: www.temkingroup.com

JD Power: Consumer Satisfaction Down

WESTLAKE VILLAGE, Calif.-Consumers grew increasingly dissatisfied with retail banking fees in the past year, with a satisfaction index at 608, down significantly from 625 in 2011 and 656 in 2010, according to analysis by J.D. Power and Associates.

The company's 2012 U.S. Retail Banking Study, found overall retail banking customer satisfaction is stagnant, improving by one point in 2012-to 753 on a 1,000-point scale. The study measured six factors of satisfaction: account activities, account information, facility, fees, problem resolution and product offerings.

Monthly maintenance fees had the most significant impact on fees satisfaction this year-more so than in the 2011 and 2010 studies-while ATM and debit card fees had less negative impacts on fees satisfaction.

The study noted improvements in satisfaction with facilities and routine transactions, and with reliability and ease of using ATMs, with the percentage of customers who use ATMs to make deposits more than doubling to 40% in 2012 from 19% in 2008. Regional banks-defined by the survey as banks with $33 billion to $180 billion in deposits-saw the biggest drop in satisfaction.

Big banks still lag other banks in overall satisfaction, but they have improved in reducing the number of problems customers experience and in problem resolution, especially at first contact, said Beird.

Credit unions were not included in the study. For info: www.jdpower.com

Banks Migrate To Higher-Income Areas

CHARLOTTESVILLE, Va.-Banks have 2,500 more branches across the U.S. than they did on June 30, 2006, but according to SNL Financial the makeup of those branches has changed as the industry shifts its focus to building branches in higher-income areas.

To make comparisons between years more consistent, SNL said it used census tract market definitions and median household incomes as of July 1, 2011, as the basis for analyzing branch openings and closings in markets for all years. Years are based on the Summary of Deposits cycle and are either as of, or reflect changes in the last-12-months ended June 30 for the stated year. SNL defines lower-income markets as those where the median household income is less than $25,000 and moderate-income markets as those where the median household income is between $25,000 and $50,000.

At the beginning of 2007, there were 5,506 bank and thrift branches located in census tracts with a median household income of $100,000 or more. Since then, 462 net new branches have been opened in those markets, an 8.4% increase.

In contrast, there were 5,626 branches in census tracts with a median household income of $25,000 or less at the start of 2007, and a net 70 branches have since closed, a 1.2% decrease. There are now more branches in areas with median household incomes of $100,000 or more than there are in areas with median household incomes of $25,000 or less.

Markets with median household incomes between $50,000 and $100,000 gained the largest absolute number of branches, netting 1,919 new branches in the nearly six-year span.

Since 2007, Woodforest Financial Group, Inc., opened the largest number of branches in markets with median household incomes below $50,000, netting 333 additional branches. Wells Fargo closed a net 367 branches in sub-$50,000 markets, the most of any bank in the U.S.

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