‘Banks’ vs. ‘My Bank’

Americans do not trust banks these days — except for their own. In Gallup polling conducted earlier this month, just 20 percent of respondents said they have “a great deal” or “quite a lot” of trust in “today’s U.S. financial institutions or banks.” Thirty-five percent said they have “very little trust” in them.

However, when respondents were asked how much confidence they have in “the bank or financial institution where you do most of your banking,” the “great deal”/”quite a lot” tally jumped to 63 percent and the “very little” figure fell to 10 percent. In Gallup’s polling on the topic in April, 7 percent said they were likely to switch to another financial institution in the next three months, vs. 75 percent not at all likely to do so. And while 11 percent said they planned to reduce the amount of money they keep at their primary bank, 30 percent intended to increase their deposits during that period.

Gallup polling last month gives a clue as to why many consumers would be inclined to increase their bank deposits at a time of economic volatility. When asked to pick the “best long-term investment” from a list of options, 34 percent of respondents selected savings accounts/CDs, putting that choice a percentage point ahead of real estate and far ahead of stocks/mutual funds (15 percent) and bonds (12 percent).

As you’d expect, the poll’s lower-income respondents were especially drawn to the safe-and-familiar bank products. Forty percent of those with household income under $30,000 picked savings accounts/CDs as the best long-term investment, as did 35 percent of the $30,000-74,999 cohort and 23 percent of those in the $75,000-plus bracket. Even in this higher-income cohort, though, savings accounts/CDs tied with stocks/mutual funds and outscored bonds (11 percent), lagging only behind real estate (39 percent).

A separate poll by J.D. Power and Associates, released earlier this month, looked at factors that influence consumers’ choice of a bank. Customer service is often a decisive one. Among respondents who’ve switched banks, “27 percent attributed their decision to either having had a previous good service experience with the new bank or receiving a positive recommendation about the institution,” says the research firm’s summary of the findings. “In contrast, better interest rates, lower fees and perceptions of the bank’s involvement in the local community were notably less important selection drivers among customers who switched.”

And then there are the factors that lead potential customers to avoid a bank. The polling (fielded in February) found 30 percent of respondents “deliberately excluding a bank from consideration due to perceived financial instability, the bank’s bad reputation or its questionable ethics.”