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).
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.
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.
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?