CU Data

Why Do Consumers Switch PFIs?

The top trigger is a change in the consumer’s life circumstances.

September 18, 2011
KEYWORDS customers , study
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In 2011, 8.7% of consumers had changed their primary financial institution (PFI) within the previous 12 months.

That’s up from 7.7% in 2010, according to a J.D. Power & Associates study cited in CUNA’s 2011-2012 Survey of Potential Members.

According to the J.D. Power & Associates 2011 U.S. Retail Bank New Account Study, the top triggers to change providers are:

  • Changes in consumers’ life circumstances (28%);
  • Fees/rates (17%);
  • Unmet expectations (13%);
  • Customer service concerns (8%); and
  • Advertising from other providers (7%).

Less-significant triggers include promotional gifts/cash (4%), wanting specific account features (3%), receiving a recommendation (2%), and branch closings (2%).

When choosing a new PFI, the top drivers were:

  • Brand image (30%);
  • Advertising (24%);
  • Branch convenience (24%);
  • Products/services (18%); and
  • Low fees (4%).

Another finding researchers deemed “one of the most unexpected” was that only 43% of customers who bought an additional financial product made that purchase at their PFI.

In other words, PFI status doesn’t guarantee loyalty.

The researchers concluded, “Customers who choose to stay with their current primary bank for additional products are most driven by positive past experience and perceptions that their bank is more focused on customers than on profits.”

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Branch vs Price

Serge Milman
August 30, 2011 3:21 pm
In other words, the value of the Branch is not so relevant to the Consumer, while Pricing remains one of the top considerations. I wonder if this data will in any way impact the way CU execs are thinking about their 2012 strategic initiatives?

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You missed the most significant data point

Brett King
August 30, 2011 3:54 pm
In the study 60% of customers said they used Social Media, 24% to discuss the performance of their bank. That's a relatively new data point, but it means that Social Media today is as powerful as advertising and branch convenience in determination of a choice of a new FI! Brett King BANK 2.0

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