Bank of America, Chase, and Citibank Are Most Vulnerable to Losing Customers, Deposits, and Revenue
NEW YORK, NY -- (Marketwired) -- Dec 01, 2015 -- A new study released today by management consultancy cg42 has uncovered high levels of vulnerability for the nation's 10 largest retail banks. Surveying more than 3,000 current customers, cg42 ranked the retail banks based on projected customer attrition and revenue loss according to its patent-pending Brand Vulnerability Index (BVI), which measures consumer frustrations. This year's study is an update to cg42's previous studies of retail banking in 2013 and 2011.
The study found that 23% of current bank customers are looking to switch and identified top frustrations among at-risk customers and customers who recently switched, including: banks failing to keep promises; being "nickeled and dimed;" limited or inconvenient branch locations; lack of competitive rates; mistakes on statements; fees; and poor customer service. These frustrations translate to a projected loss of $86 billion in deposits and $4 billion in revenue over the next 12 months alone.
"Since we began studying the retail banking industry in 2011, we have seen consistently high levels of frustration among its customer base," said Stephen Beck, founder and managing partner of cg42. "Despite the improvement in vulnerability levels from 2011 to today, a majority of customers continue to believe that banks don't act in the best interests of their customers. With hundreds of billions of dollars on the line, banks need to reevaluate how they treat their customers and understand the substantial financial impact of failing to address customer frustrations."
Survey responses were collected, analyzed, and modeled to produce a ranking of the top 10 retail banks by vulnerability, from most to least:
1. Bank of America
4. Wells Fargo
7. TD Bank
9. Capital One
10. US Bank
The most vulnerable bank, Bank of America, also ranked at the top of the list in 2011 and was the third most vulnerable bank in 2013. With 29% of customers at risk, cg42 projects that 10.3% of Bank of America's customers will move $57 billion in deposits to another institution in the next year.
Key findings of the study include:
- $649 billion in deposits and $34 billion in revenue remain at risk. This compares with $627 billion in deposits and $34 billion in revenue at risk in 2013, and $675 billion in deposits at risk in 2011.
- 23% of the top 10 retail banks' customers are looking to switch banks in the next 12 months, and 8% are projected to do so.
- Over the next 12 months, the top 10 retail banks are projected to lose a combined $86 billion in deposits and $4 billion in revenue (after they "benefit" from the vulnerability of their peers).
- The customer bases of Bank of America, Chase, and Citibank are the most at-risk and are projected to lose a combined $116 billion in deposits in the next 12 months.
BVI surveys four components of brand vulnerability: frequency of customer frustrations; customer sharing behavior (such as disclosure of frustrations on social media); the impact of frustrations on customers' likelihood to leave; and the uniqueness of a frustration to a particular bank.
cg42 has conducted BVI studies across a range of industries, including cable and hospitality, and the BVI framework can be applied in a variety of sectors to produce similar results. For more information on cg42's studies, or to download a full report, please visit www.cg42.com.
cg42 is the boutique management consulting firm that pioneered the patent-pending approach to quantify frustration and permission. We build competitive strategies that drive greater market share for our clients. We speak the languages of operations, finance, and marketing with equal fluency, giving us a definitive edge in helping the disparate parts of our clients' organizations embrace a common strategy for growth. cg42 has helped senior executives at Fortune 100 companies in the technology, telecommunications, financial services, consumer services, and hospitality sectors successfully address their most pressing business, competitive, marketing, and brand strategy challenges. For more information, please visit: www.cg42.com.
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