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J.D. Powers Bank Study - More People Switching Banks

Friday, March 4, 2011 - 6:06 AM
This study released by J.D. Powers provides some good news for depositors. It shows more customers are shopping for new banks and promotions are effective for banks. Hopefully, this will encourage more and better bank deals.
As the banking industry continues to recover from the financial crisis, customers are increasingly shopping for and switching to new primary banks, according to the J.D. Power and Associates 2011 U.S. Retail Bank New Account Study
Banks that perform well in acquiring new customers - Chase, PNC Bank and SunTrust Bank, in particular - tend to be aggressive in their advertising and promotions.

Hat tip to Justin at Banking / Loans Blog for posting on this press release.
Ken TuminKen Tumin5,472 posts since
Nov 29, 2009
Rep Points: 125,708
1. Friday, March 4, 2011 - 5:17 PM
I hope these people are transferring their accounts because of higher deposit rates and not because of measly $50 promotions or other gimmicks. Otherwise, we are just rewarding them for useless promotions and encouraging them to continue with their meager rates.
loulou554 posts since
Aug 3, 2010
Rep Points: 3,437
2. Friday, March 4, 2011 - 10:09 PM
Well, the article suggests that most people who change banks do so due to a 'change in life circumstance,' and when shopping for a new bank, little emphasis is placed on deposit rates and fee schedules. Instead, they seek convenience and are lured by marketing tactics. So yes, those promotional cash offers from Chase are working.

The article implies that most people are comfortable banking with bank that has a branch convenient to them. Obviously (beyond rewards checking accounts, which are still a niche) most high-yield savings accounts are only available online and apparently people aren't ready to make the transition (or juggle multiple accounts) just yet.

The most interesting tidbit is that nearly half of all people don't turn to their bank for additional credit products. Personally, I think this is deceiving.

-For most people, credit cards have replaced traditional unsecured loans and most people acquire credit cards through direct mail offers.

-When selecting a mortgage company, most people seek referrals rather than shopping around.

-When purchasing a car, the average people applies for financing through the dealer. Of course, they'll pay larger fees and higher interest rates than had they acquired a pre-approval on their own. And often they'll be lured by auto manufacturer’s promotional interest rates that are deceiving (example: last fall GMAC was advertising 1.9% APY on all used G6s, but charged $600-$800 in loan fees that made the loans costly).

 I guess when it comes to finances, many people are ignorant. :(
SouthwesternSouthwestern23 posts since
Jan 25, 2011
Rep Points: 98