Do You Trust Your Bank? Most People Don’t
Phrases like “bank bailout” and “too big to fail” have left a sour taste in the mouths of consumers. The results are easy to see in recent consumer confidence polls, suggests Bankrate. The question “Do you trust your bank?” posed by banking consultants BAI & Finacle in their biannual Index of Bank Sentiment survey received negative replies from consumers. Not only that, but the survey shows that bankers’ assessment of consumer confidence is entirely out of whack.
The divide between consumer and banker opinion
The Index of Bank Sentiment survey polled a large group of bankers and more than 2,500 U.S. banking customers. According to the results, the gap between consumers who trust their bank (77 points on the survey scale) and bankers who believe consumers trust them (121 points) suggest a cavernous divide, rather than a mere difference of opinion. A mark of 100 points for either side would have indicated reasonable confidence.
Some financial experts believe that the rise of non-traditional consumer credit products like payday loans supports the findings of the BAI & Finacle survey. If the answer to the question “Do you trust your bank?” is no, it is not surprising that a consumer would look to other financial institutions for small loans.
Trust your bank versus perception
Curiously, while the Index of Bank Sentiment survey indicates that most consumers didn’t trust their banks (63 percent), 64 percent of consumer respondents still indicated that their primary bank has a “good image and reputation.” Forty percent felt their bank wasn’t looking out for their best interests.
In terms of bank fees, a whopping 85 percent of consumers voiced their expectation that they should not have to pay for a checking account. Only 44 percent found current bank fees to be reasonable.
Commercial banks on the Fortune 500 list
While community banks and credit unions have become increasingly popular with consumers, large commercial banks still reign supreme when it comes to capturing consumer business. According to the recently released Fortune 500 list, 20 commercial banks cracked the list of top U.S. companies, with seven in the top 100. Bank of America Corp. ranked first among commercial banks, and ninth overall on the Fortune 500. JPMorgan Chase & Co. (13 overall), Citigroup (14), Wells Fargo (23) and Goldman Sachs Group (54) rounded out the top five.
US consumers trust banks opinion of other financial service companies
A world of financial service companies does exist beyond banks, from investment brokers to payday loan companies. Expanding upon the BAI & Finacle survey, The Edelman Trust in U.S. Financial Services Survey found that almost half of consumers polled trusted their financial service company less in 2010 than the previous year. Forty-six percent of respondents attributed the erosion of trust to corporate greed, while 20 percent felt that the financial services industry exacerbated the country’s financial meltdown.