Brand Finance, a global brand valuation and consultancy firm, this year rolled out market research on U.S. bank brands to find out how customers’ opinions have changed at a time of major disruption to the industry.
The 2016 average trust score for U.S. banks was 64.9%. This compared with 77% for Chinese banks, 60.5% for U.K. banks and 47% for Spanish ones.
“As global banks retreated after the Great Recession, the traditional banking model has changed,” Brand Finance’s chief executive, David Haigh, said in a statement.
Haigh said prevailing trends suggest that fintechs and niche “challenger banks” are eating into big banks’ profits and luring their customers away with better quality service at lower prices.
“Traditional banks tend not to be set up as quick innovators,” he said. “Instead, they compete for customers’ trust, and our research indicates which banks are the most trustworthy.”
The research was based on data gathered last November from online questionnaires involving 19,000 people in 22 markets. Only U.S. respondents were questioned about U.S. banks.
They were first asked which bank they were a customer of and whether they were likely to switch to a competing bank brand. Bank brands with the highest proportion of customers who “might” or were “very likely” to switch were deemed to have the least loyal customers, whereas banks with a majority “might not” or were “very unlikely” to switch were seen to have the most loyal customers.
Respondents were separately asked whether they considered particular bank brands to be trustworthy.
Here’s how four U.S. banks ranked with their customers in the Brand Finance research.
Leading the Race
JPMorgan Chase emerged as the most popular U.S. bank brand, with 15.8% of respondents saying they would switch to Chase if they had to switch banks.
According to Brand Finance, the bank’s retail division has stayed relatively scandal-free, in contrast to its investment division counterpart whose sullied reputation has not recovered since 2008.
It said Jamie Dimon, the bank’s chief executive, skillfully steered the bank through the financial crisis, and since his appointment in 2006, the bank’s assets have risen by upward of 100% and earnings have increased threefold.
In July, Chase posted quarterly net income of $7 billion in the three months ended June 30.
Dimon has had a major positive effect on customer loyalty and trust. Brand Finance noted that his controversial statements on social media, such as those he made on Bitcoin and President Donald Trump, led him to “trend” globally, helping to bring the brand into the public eye and capture the attention of millennials, who were found to be the most likely age bracket to switch to Chase.
Moreover, Chase is openly planning both to invest in and collaborate with fintechs, a huge enticement for younger customers. In May, Dimon said the bank was following through on its promise to give clients a free, automated investment service as part of a future bundle of digital-banking products.
Chase’s focus on sustainability is also likely to attract potential customers. The bank’s “Invested in Detroit” campaign is designed to revitalize the community’s local housing and job market.
Furthermore, Chase claims that it will source 100% of its global energy needs through renewable power by 2020.
Finally, Chase’s branches exist nationwide, making it easily accessible and giving it a physical presence across the U.S. that helps remind consumers of the option to bank there.
New Marketing Campaign
Citi was the second most popular bank in the study, with 13.3% of customers saying they would be willing to switch to it. Brand Finance noted that this coincided with the bank’s first major marketing effort since 2014.
The “Make It Here” campaign, launched early last year, highlighted the smooth integration of Citi banking into everyday life and focused on the consumer’s wants and needs — a shift from its previous marketing focus on functionality to a more customer-driven effort that helped to increase customer loyalty.
In addition, Citi’s Pathways to Progress initiative, designed to empower millennials to develop essential workplace skills, demonstrated its commitment to the age group most likely to switch between banks.
Most Loyal Customers
U.S. Bank has the most loyal customers, with 60.2% saying they were very unlikely to switch to a competitor, according to the Brand Finance survey.
The report said this was largely related to the bank’s sales model, which encourages branch managers to approach members in the community — predominantly local business owners — with the main aim of developing relationships instead of pushing a hard sale.
This innovative approach helped the brand achieve greater loyalty among its customers who feel confident discussing any problems they encounter and are more likely to work with the bank to solve them together.
Continuing to Sink
How far the mighty have fallen.
Brand Finance said it was no surprise that Wells Fargo was voted the least trusted bank, with a trust level of only 47.2%, following the catastrophic fake-account opening scandal. The number of unauthorized accounts opened has been estimated at around 3.5 million between 2002 and 2017, and has resulted in more than 5,000 job losses.
The extent of the scandal is still being investigated as further developments are uncovered.
This summer, when it seemed that damage to its reputation could not get worse, Wells Fargo customers accused the bank in a lawsuit of forcing them to pay for unnecessary auto insurance.
— Check out JPMorgan Ordered to Pay More Than $4B to Texas Widow on ThinkAdvisor.