Study: 34 percent of bank customers will be loyal in 20102010-04-27
For the fourth year in a row, customer loyalty in banking is on the decline, according to a recent report by J.D. Power and Associates.
The study says that although 34 percent of bank customers will definitely not switch banks in 2010 - compared with 46 percent in 2007 - overall satisfaction has decreased on a 1,000 point-scale from 749 in 2009 to 748 in 2010.
The study also finds that poor customer service has so far been the most common cause of customer attrition in 2010, with 37 percent of customers switching for that reason.
Michael Beird, the director of banking at J.D. Power and Associates, says that fees continue to have a significant impact on customer loyalty in banking, with 29 percent of customers switching between financial institutions in 2010 because of high fees for products or services.
"While fees have a significant impact on customer satisfaction, banks may mitigate this effect by giving customers choices," says Beird. "Customers tend to be considerably less dissatisfied when they have different overdraft options. Proactive communication may also help to lessen the negative impact of fees."
Reacting to the fee problem, Bank of America recently announced it will stop issuing overdraft fees. The bank's policy goes into place in June 2010.
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