Bank Transfer Day and the Occupy Movement have received tremendous attention, and for the first time we have market research data to measure the impact on the financial services industry. Javelin’s research estimates that 5.6 million U.S. adults with a banking relationship changed providers in the past 90 days. Of those switchers, 610,000 US adults (or 11% of the 5.6 million) cited Bank Transfer Day as their reason and actually moved their accounts from a large to a small institution. With a Google search of “bank transfer day” returning fully 22,000,000 responses we’re not surprised that these angry bank-switchers represent nearly a three-time increase over the amount of people who took their funds out of large banks for highly-similar reasons during the previous 90-day period in 2011.
This exodus was certainly not the massive departure banks might have feared. Javelin’s nine years of customer-transaction research insights has found that people are highly resistant to moving their money, and even Huffington Post’s similarly-positioned 2008 “MoveYourMoneyProject.org” failed to barely even register in previous Javelin surveys. Yet this time, Bank Transfer Day and the Occupy Movement did have a measurable impact.
In comparison to the 11% of actual bank-switchers who cited Bank Transfer Day, 26% of the switchers stated that they switched because the bank charged too many fees during the 90 day measurement period. Individuals frequently state dissatisfaction with banks over reasons that range from customer service to rates and fees, and other common reasons that motivate individuals to switch banks also includes a simple relocation of their primary residence. While financial institutions increasingly enable electronic methods for interacting with one’s money, the transition hasn’t been complete enough to eliminate the essential importance of a local branch or ATM. The transition to electronic money inches steadily forward, but the evolution is far from complete.
Javelin urges banks and credit unions alike to increasingly focus on sustainable mutual-prosperity for both provider and customer, and we believe that technology can increasingly make such a shared-value approach possible. Examples explored by our research range from fee-based services for online expedited payments (to reduce even larger late fees), security and identity protection products, and mobile-based methods for giving individuals more control over what happens to all their financial accounts. Javelin’s recent social media research of financial institutions examines how FIs are meeting consumers on Twitter and in other social media spaces. FIs will need to be agile through social media, smartphones, tablets and other new interaction methods to strengthen customer connections while enabling them with improved control over their personal financial affairs.
As always, Javelin subscribers are invited to inquire for further details on this or any other research study.
Methodology statement:
Using a questionnaire designed independently by Javelin Strategy & Research, the Bank Transfer Day findings are culled from an online survey of 5,878 consumers fielded in December 2011. The survey targeted respondents based on representative proportions of gender, age, income, and ethnicity, and data was weighted to U.S. census proportions. The survey is based on a set of questions that were first fielded in 2003, and are now deployed on a twice-annual basis.
