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Even as there are early signs that consumer confidence in financial institutions is returning, there is one big exception: in a survey ranking almost 50 financial services companies in the U.S., consumers placed the nation’s largest credit card issuers at the bottom.
The recently released survey, the 2010 Consumer Advocacy Rankings by Forrester Research Inc., asked 4,500 consumers to rank 46 financial services companies according to the degree to which the company was doing what was best for consumers, and not just catering to its bottom line. The financial services companies included banks, investment companies, and insurance companies.
According to the results, barely one year after the depths of one of the worst financial crises in the country’s history, Americans’ confidence in their financial institutions is coming back. However, while 13 firms saw consumer trust go up over the past year, the largest U.S. credit card issuers all competed for bottom ranking. The companies receiving the very lowest rankings included Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, and Citibank, with HSBC receiving the lowest ranking of all.
Not a single large U.S. bank ranked in the top ten of consumer scores. The highest consumer satisfaction rankings went to:
- USAA (insurance)
- A credit union
- An independent insurance agent
- USAA (banking)
- An independent financial advisor
- AAA
- State Farm
- A regional or local bank
- Aflac
- GEICO
Insurance companies saw the greatest increase in consumer confidence, and credit unions as well as regional banks also remained high in the rankings. A high ranking means that customers trust the financial service company to treat them like a person and not a number; to be fair in disputes and do what is right; offer fair rates and terms; and be clear about charges and fees.
It is not unusual for large banks to rank towards the bottom of the list in the yearly survey, according to Forrester Research vice president, Bill Doyle.
Why do big banks get the lowest rankings? “Part of it is that the banks are preoccupied with their bottom line. They are public institutions who are in business to make money for their shareholders and inevitably, that shows to customers,” Mr. Doyle explained in a statement to the New York Times.
After a year of aggressive credit card interest rate hikes, record foreclosures, and huge executive bonus pay-outs, even as consumers struggle with a prolonged economic downturn in large measure spurred by bank lending policies, consumers may have a few more reasons to distrust the nation’s largest banks.
Credit unions continued to rank high with seven out of ten of credit union customers (70 percent) saying their financial institution puts their interests first. Credit unions are non-profit institutions owned by their customers, which, generally speaking, results in better rates and terms and greater customer service. The next highest satisfaction ranking went to USAA, which offers financial services to military families, with 64 percent of customers saying that they felt the bank put their interest before its bottom line. Regional banks also received relatively high approvals, with around four out of ten consumers ranking them high.
Consumers who rank their financial service firm low, not surprisingly, are more likely to take their business elsewhere over the next year or so, according to Mr. Doyle. Indeed, more consumers appear to be taking an interest in credit unions. Over the last year, credit unions have grown at a two percent growth rate per year, the highest growth rate credit unions have seen in a decade. Credit unions currently have 93 million members; if the new growth rate holds up, they could be adding almost two million new members a year.
