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TheStreet Open House

Survey: Consumers don't want what banks are offering





It's hard when a relationship ends, but what can be worse is that period just before it's over -- the time when you realize it isn't going to work out, but you haven't gotten around to doing anything about it yet.

Many consumers may be at a similar point with their banks today, according to a new MoneyRates.com survey.

The Op4G-conducted survey asked 2,000 American adults what factors would be most likely to make them change banks. The results revealed that the issues respondents said are most likely to make them switch are the same ones that seem to be spreading at banks throughout the U.S.

What makes customers leave banks?

Here are the factors that respondents said are most likely to make them leave their current bank, from most to least common:

  1. A new or raised fee (47.7 percent)
  2. A bad customer service experience (21.4 percent)
  3. Closure of a convenient branch (14.5 percent)
  4. Uncompetitive interest rates (10.6 percent)
  5. Lack of up-to-date online features (5.9 percent)

Those responses give you an idea of what customers want. A look at what banks are actually offering will give you an idea why so many of these relationships seem at risk of failing.

Why customers and banks may be headed for a split

Nearly half the customers surveyed said that they would react negatively to a new or raised fee, and yet the banking industry has been steadily increasing fees in recent years. According to the most recent MoneyRates.com Bank Fees Survey, the number of checking accounts with no monthly maintenance fee declined by 5 percent over the past year, to just 30.3 percent of all accounts. Meanwhile, the average monthly maintenance fee and overdraft fee increased. The banking industry seems bent on doing the one thing most likely to irritate customers.

A bad customer service experience was the second most likely trigger for customers leaving their banks in the survey, yet many prominent banks responded to the aftermath of the financial crisis by cutting staff and have continued to do so since. The Wall Street Journal reported in November that JPMorgan is ahead of schedule in its plan to cut 4,000 jobs from its consumer banking division. Staff reductions mean longer waits for service and more automated phone trees -- in other words, more bad customer service experiences.

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