Skip to main content

A new study shows large banks have a growing problem on their hands — customers are losing trust in out-of-touch banks and see larger institutions as becoming more selfish. The February study of 50 U.S. financial service companies from Forrester Research says that customers are so fed up that they’re more than willing to take a walk and that banks need to wake up before they lose them for good.

There is some good news for financial institutions and we’ll get straight to that upfront. Insurance companies, especially USAA (Stock Quote: USISX) and Geico, fared well in the study. And major regional banks like Philadelphia-based PNC Bank saw their polling positives bounce back in 2010.

But major national banks and investment firms absorbed a significant loss in brand stature and customer confidence and trust, Forrester reports. According to the study, “Some of the largest banks in the U.S., such as Chase and Citibank, still crowd the very bottom of the rankings. And almost all investment firms are in the bottom half of our rankings. For the second year in a row, these wealth management firms as a group get the worst customer advocacy ratings overall."

Here’s a list of the banks that fared the worst on the study question: “My financial provider does what’s best for me, not for its own bottom line”

    HSBC ¿(Stock Quote: HBC)

    Citibank (Stock Quote: C)

    Fifth-Third Bank ¿(Stock Quote: FITB)

    TD/Commerce (Stock Quote: TD)

    Capital One ¿(Stock Quote: COF)

    TheStreet Recommends

    Chase ¿(Stock Quote: JPM)

    Bank of America (Stock Quote: BAC)

    In the case of each bank’s customers, a significant majority said their banks put their own interest ahead of customers. Here’s a breakdown, percentage-wise:

    • Bank of America              33%
    • Chase                             31%
    • Capital One                     29%
    • TD/Commerce Bank         28%
    • Fifth-Third                       27%
    • Citibank                          26%
    • HSBC                              16%

    Let’s face it, the only institution faring worse in the market of public opinion is Congress, which earned a 28% approval rating from a Feb. 11 Quinnipiac University survey; and a minuscule 16% of Americans who believe Congress “will do right most of the time."

    As the joke goes, “it’s so cold in Washington these days that we saw a Senator with his hands in his own pockets.”

    When your institutional reputation rivals members of Congress, you know you have a lot of making up to do — and that’s where banks find themselves today. As Forrester vice president Bill Doyle puts it, banks should be "nervous."

    Says Doyle, “low consumer advocacy scores are a reliable indication of customer retention and cannot bode well for attraction new customers either. This is important because as large banks reach the federal limit of how much they can increase deposits by acquiring other banks, new customers are becoming a sole source of increased revenue, making consumers a competitive commodity for banking institutions.”

    There’s more bad news for the banks that comprise the bottom of the Forrester list. According to Doyle, customers who rate their banks low in consumer advocacy are likely to switch banks within the next year and are “going to be reluctant to put any more money and open new accounts at those institutions.”

    Not a good showing for banks — but at least there’s plenty of room, if not time, to improve.

    —For the best rates on loans, bank accounts and credit cards, enter your ZIP code at