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What Makes You Love Your Bank?

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In the last few months you may have noticed Ally Bank's Love Your Bank marketing campaign. In connection with this theme and the upcoming Valentine's Day, Ally Bank released the results of a survey in which they asked "what makes customers love their banks?". I thought it would be interesting to review the results of the survey and to ask the same question in my own poll. First, here's a summary of the survey results:

How Do I Love Thee? Ally Bank Counts the Ways
U.S. survey examines what makes customers love their banks

MIDVALE, Utah (Feb. 10, 2011) – This Valentine’s Day, Americans are counting the ways they love their bank. Security of savings and round-the-clock customer service top the list.

Other interesting findings

* Overall: 24 percent of respondents rank security as the option they love most in a bank and 22 percent love 24/7 live customer service most.

* Age: Americans 45 and older appreciate security most, while those in the 35 to 44-year-old age bracket identified most with 24/7 live customer service.

* Income: 26 percent of respondents making more than $100,000 per year love competitive interest rates most, while 24/7 live customer service tops the list for those making $35,000 or less per year.

* Household size: Those with three or more people in their house said they loved the 24/7 customer service banking feature best (27 percent), compared to those with 2 or 1 (16 and 22 percent, respectively).

Editor's Note
A telephone survey was conducted by Opinion Research Corporation among a national probability sample of 1,004 adults comprising 502 men and 502 women 18 years of age and older, living in private households throughout the continental U.S. Interviewing was completed during the period of Dec. 10 to 13, 2010. The margin of error for the survey was +/- 2 percent.

About Ally Bank
Ally Bank is a U.S. retail bank that offers a straightforward approach to banking with no monthly maintenance fees and 24/7 live customer service. A subsidiary of Ally Financial Inc., the bank offers online savings, interest checking, money market accounts and certificates of deposit with terms ranging from three months to five years. Follow us on Twitter @allybank or at facebook.com/allybank. Member FDIC.

love your bank survey

My Thoughts

Below are my thoughts on the features mentioned in the survey, and what I decided to change in my own poll.

Competitive Interest Rates

Perhaps for the average person who doesn't have much in savings, competitive interest rates may not be that important. If you only have $5,000 in savings, a one percent difference in interest rates is only $50 per year. However, for savers who depend on earning interest on their savings, interest rates are much more important. Thus, I'm going to assume the vast majority of readers here would choose competitive interest rates in this poll. To make the poll more interesting, I left out interest rates as a choice.

Security

Another choice that I felt was a little questionable was security. This is like asking a car driver if an engine is important. If the engine doesn't work, nothing else about the car matters. The same applies to security. If security is broken, nothing else about the bank matters. However, I decided to leave this in the poll since there are various levels of security. Some banks have logins that make it harder for hackers, and provide features that would help customers spot fraudulent activity such as having the capability of emailing transaction alerts.

There have been concerns from a security point-of-view over what Ally sends in emails. This change occurred in October when they changed to Cashedge for their transfer service.

Automatic emails are sent for transfer notifications. Even though there is no account numbers, bank names and dollar amounts are include in the emails. Since emails are not secure, that information could be leaked. Email alerts can help make things more secure, but if too much information is contained in the emails, it can make things worse.

24/7 Live Customer Service

If the bank has done a good job on its website with thorough and clear documentation and in an easy-to-use banking interface, customer service becomes less important. However, problems will always come up, and when things go wrong, this is where good customer service is really appreciated.

Being able to quickly connect to a live customer service representative (CSR) is important, but we also need a CSR who is knowledgeable and helpful. How important is 24/7 support? ING Direct's CSR is only available 8-to-8 7 days a week. For those on the west coast, that may be an issue.

I do like having the options of online chat and secure email in addition to a phone service. Ally Bank definitely has an advantage over ING Direct which lacks both online chat and secure email.

Large Network of Branches

Perhaps this is why the megabanks continue to have such a large market share. Many people just want easy access to branches. However, that's costing them quite a bit in higher fees and lower deposit rates.

Internet banks can reduce the appeal of a large branch network if they offer a good website interface, good customer service, postage paid envelopes for deposits and access to many free ATMs. Even better than postage paid envelopes is remote deposit capture in which you can deposit checks with your scanner or smart phone.

Daily Compounded Interest

It's interesting that 9% of the people in the survey selected this. I wonder if they misinterpreted this as interest vs. no interest. Daily compounded interest makes very little difference especially these days with low interest rates. For example, if the interest rate is 3.00% and your balance is $10,000, the difference in total interest earned after one year between daily compounding vs. no compounding is only $4.53.

What's more important is when interest is credited to the account. Some banks credit interest quarterly rather than monthly. What can make this bad is if the bank doesn't credit unpaid accrued interest if you close the account. In this case if you closed your account a few days before the end of the quarter, all interest accrued for most of that quarter could be lost.

Other Important Bank Features

Ally's survey left out two features that I thought should be included. These other features might not be appreciated by the average person who has very few bank accounts and who doesn't use online banking much. However, for savers with many bank accounts who actively use many internet banks, these are much more appreciated.

ACH Transfer Service

Savers need multiple bank accounts, and that's when a bank's ACH transfer service becomes important. A good service allows the customer to easily initiate transfers to and from his/her accounts at other banks.

The ACH service should allow the customer to link to other accounts completely online, and there shouldn't be a limit on the number of links. Once the links are established, the ACH service should make it easy to schedule transfers. There shouldn't be any limitations about the dollar amounts that can be transferred.

Once the transfers are initiated, the transfers should be fast. It shouldn't take more than one business day for the transfer to complete. Also, there shouldn't be any time in which the transfer amount has been debited from the source account but not yet deposited in the destination account. Money floating around the virtual world during this time isn't earning interest. Finally, once the money has been deposited into your bank account, there shouldn't be any hold time in which you don't have access to the money. At the very least, this hold time shouldn't be any more than one day.

Ally Bank has ranked high in this area, but the changes it made last October seemed to be a step backward.

Efficient Online Banking

The second choice I added is "efficient online banking". I define this as an online banking interface that's easy to use. This might be considered a superset of an ACH transfer service. This includes everything from logging into the account, managing the accounts and opening new accounts. An efficient online banking system makes it easy to view transactions, pay bills online and make account changes like in the beneficiaries.

I think most would agree that ING Direct scores well in this area. Ally Bank also scores well, but like ACH transfers, the October change didn't help to improve things in this area.

Other Important Features?

Did I leave out anything? What bank features are important to you? Or as Ally asked it, what makes customers love their banks?



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Comments
14 Comments.
Comment #1 by Alan posted on
Alan
Alliant Credit Union meets the most important standards.  Their ACH transfers are completed within one day (if submitted by Noon CST), transfer limit is $100K per day, Customer Service is available 24/7, 364 days a year (closed Christmas Day), and rates are competitive.

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Comment #2 by Anonymous posted on
Anonymous
24/7 service is nice but I place a higher value on bank websites that provide plenty of control/options that eliminate the need to contact them in the first place. Few banks provide this, which it a bit ironic because banks tend to distrust their outsourced foreign bank reps and provide then a more controlled computer interface that could also be made available to customers.

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Comment #3 by Jeffry Pilcher | The Financial Brand (anonymous) posted on
Jeffry Pilcher | The Financial Brand
You're absolutely right Ken. Security is like trust. If it isn't there, you won't be getting someone's money.

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Comment #4 by Anonymous posted on
Anonymous
Yes,  I agree with Efficient Online Banking, is the top choice.  Who needs live customer service if you can have a personal banking that you can do everything online.  The 2nd, would be the ACH transfer and fund be available within 24 hrs, and without any fees. 

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Comment #5 by paulhb2 posted on
paulhb2
Ken, your analysis is right on.

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Comment #6 by dave9354 posted on
dave9354
The highest interest rates for savings and CD's are the most important for me!!

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Comment #7 by Anonymous posted on
Anonymous
I don't need live customer service, but I highly value a quick and personalized  email response to questions or concerns I express.  Nothing bothers me more than to get a canned boilerplate response to a specific question.

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Comment #8 by tightwad posted on
tightwad
No love here for any banks. Some are better than others, but don't come close to comparing to most member owned credit unions.

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Comment #10 by mrvirgo posted on
mrvirgo
I agree fully with Tightwad. Banks look out for themselves first. I've been battling with BofA since December 14, 2010 for a $25.00 bonus after meeting all their criteria for it.. If BofA was as good at keeping promises as they are at stonewalling, I would not have closed my credit card with them. Next to get closed is  my free BofA checking.  Compared to BofA, Ally is wonderful. I've never had a moment's grief with Ally, but the rates are so low I moved my liquid funds to a rewards checking and money market account with Evantage Bank.  My big money is with Alliant Credit Union which makes any bank look awful by comparison.

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Comment #11 by cactus posted on
cactus
Ally is the only bank I've dealt with that comes close to a credit union in rates. I would guess that that is because they are making lots of car loans to GM and Chrysler auto buyers, and most banks aren't making loans to anyone.

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Comment #12 by RJM posted on
RJM
Not just one thing is important but one that is is SIMPLICITY.

With ING, my account # or whatever is always there so it just takes a 6 digit password and Im at my account. With one hand.

And it can be all letters.

Other banks have ****y procdures like typing in long account numbers and passwords that include letters & numbers & caps & stuff. All that slows things down in the name of security. (And I am less likely to want to jump through hoops.

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Comment #13 by opera ghost (anonymous) posted on
opera ghost
welcome back jerry pilsner number 9 scot j is spam and should be removed weather is great in sarasota today heading out to armands circle for lunch

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Comment #14 by Southwestern posted on
Southwestern
Unfortunately, I'm currently living paycheck to paycheck and thus a timely online bill payment system reigns. Although the banking industry is dominated by only three or four billpayment systems (beyond the likes of BoA and Chase, which operate their own proprietary systems), each bank seems to have variations. For example, two banks I have accounts with utilize CheckFree – but one withdraws the funds two days earlier than the other for the same bill!

Beyond that, I seek rewards. My primary account has been with National City/PNC since the Points program launched. In that time period, I've earned over 100,000 points – enough for $200 cash or a round-trip air ticket anywhere in the lower 48 states up to $500. These points were accumulated from bonuses & every day banking – NOT from usage of my check card (except in cases where I can only use it as a debit-not-credit card). (Additionally, I also received $300 in cash bonuses for opening the account). Due to program devaluations (and an eventual end for free accounts), I'm seeking an alternate program. But it's good while it lasted!!

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Comment #16 by Anonymousoper tist (anonymous) posted on
Anonymousoper tist
ty for removing 9 how insightful jerry p

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