Have the financial crisis, the Occupy Wall Street movement, and rising fees faded in memory for bank customers?
Five years after troubles in the banking sector helped topple the American economy into recession, a new survey suggests that consumers are starting to feel better about their banks.
Approval ratings for financial institutions are now at 2007 levels — the year before the epic collapse on Wall Street, according to the American Customer Satisfaction Index, an annual nationwide study that is scheduled to be released Tuesday. The index, based on interviews with 5,000 bank customers, is published by ACSI LLC, an Ann Arbor, Mich., research firm.
Consumers gave banks overall a score of 78, higher than utility companies but lower than the automobile industry. Large banks still lag community banks and credit unions by as much as 10 points, according to the survey.
“As time passes, negativity tends to fade for these banks,” said David VanAmburg, managing director of ACSI. “People tend to be forgiving over time.”
ACSI only cited four banks by name — Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo — because only those had a large enough sample size among respondents to the survey. It is unclear how many banks in total were rated by the respondents.
Even at the height of the financial crisis, when bank satisfaction was low, few customers switched institutions because of hassle involved with changing so many of their accounts and bills.
‘It will take us some time to get there, but we believe we have the right focus.’
Still, the scores are released as fresh reminders of bank misdeeds make headlines. JPMorgan Chase last month agreed to a historic $13 billion settlement with the Justice Department over the firm’s sale of low-quality mortgage-backed securities that collapsed in value during the housing bust and helped spark the recent financial crisis.
European regulators fined several global financial institutions $2.3 billion last week for allegedly rigging benchmark interest rates.
Consumers with checking and saving accounts with banks don’t seem to link those large-scale mortgage securities and interest rates controversies with their everyday interactions with their local financial institutions, VanAmburg said.
“A lot of that noise doesn’t necessarily impact the customer experience,” he said.
The higher scores come even as banks increased their fees by 2 to 3 percent this past year, VanAmburg said.
Banks have improved services by providing more efficient websites and mobile applications that allow consumers to quickly conduct transactions from their computers or phones. With more customers banking online, the lines inside branches are smaller, ensuring that customer interactions with bank staff are more pleasant, VanAmburg said.
“As banks are doing better at providing services online,” he said, “it’s relieving some of the pressure at the bank level.”
The results, while the best in five years, still indicate that the industry has more work to do, said Deirdre Cummings, legislative director for the Massachusetts Public Interest Research Group, a consumer advocacy organization.
“They’re still saying 1 out of 4 people has a problem with a bank,” Cummings said. “They’re clearly underperforming.”
For a service company, such as a bank, a score of 80 or above would be high performing, according to ACSI.
Cummings said her organization continues to field complaints from consumers about the extensive fees, the lack of services and products, and the high number of transactions that can only be done electronically.
Recognizing that big banks have tarnished their images, smaller financial institutions and credit unions continue to encourage consumers to switch, emphasizing better customer service, even as they struggle to provide the same convenience and branch network.
Bank of America, the largest retail bank in Massachusetts, in particular continues to lag in some customers’s eyes. Its score of 69 is the lowest of four big banks in the survey, and still below the 72 it scored in 2007.
“We know we still have some work left to do,” said Donald J. Vecchiarello Jr., a Bank of America spokesman. “Achieving top-level customer satisfaction requires an ongoing commitment to meet our customers’ expectations. It will take us some time to get there, but we believe we have the right focus to make it happen.”
Bank of America has been ahead of other banks in charging and proposing new fees and closing branches.
Regulators also have questioned whether the bank’s practices forced some homeowners into foreclosure.
Bank of America and other banks have tried to polish their image in the past year and have spent millions on advertising campaigns that emphasize how they help consumers or are different than their cold, fee-charging competitors.