Size does seem to matter when it comes to snagging new bank customers. That’s the takeaway after a new study from J.D. Power that shows big bank behemoths are drawing much-needed customers away from regional banks. Here’s a dive into the details.
The 2010 Retail Bank New Account Study was released June 24. Inside, it says that of every 10 customers to kick some tires at a national bank, seven of them will walk away as account holders.
But customers at smaller regional banks are a tad more hesitant to sign on the dotted line. J.D. Power says that only 59% of bank customers choose to open an account at a regional bank they were considering.
There’s got to be a good reason for that, right? One that counters the popular notion that Americans are ticked off at big banks after the big Wall Street bailouts of 2008 and 2009.
The journalism website ProPublica does a good job of tracking the Troubled Asset Relief Program money. As a result of the big bailout, 837 U.S. banks got $612 billion in funds from Uncle Sam (with about $195 billion already paid back). But big financial institutions got their meat hooks on the bulk of the money. AIG (Stock Quote: AIG) cashed in for $48 billion (so far — the U.S. is committed to $70 billion to AIG overall). And Bank of America (Stock Quote: BAC) got $45 billion (it has since paid all the money back).
Yet, according to the J.D. Power study, more customers are choosing big banks over smaller ones — TARP funds and all.
Apparently, what larger banks have going for them are deep pockets and some aggressive marketing campaigns. The study points out that bank customers were more likely to opt for larger banks that were more prone to offering promotional gifts and better interest rate deals.