American’s banking experience has improved year over year, according to the second annual TD Bank Checking Experience Index.
According to the Index, 86% of consumers rate their day-to-day experience with their checking account as excellent or very good (a slight uptick from 83% in 2013) and 85% of consumers say their bank is excellent or very good when it comes to accessibility (compared to 83% in 2013).
The TD Bank Checking Experience Index is a nationwide survey of more than 1,500 consumers with checking accounts at various financial institutions.
Why they range beyond banks
Although consumers are generally happy with the services provided by their banks, 22% of survey respondents with a bank account say that over the last three months they have used alternative banking products such as check cashing services (12%), money transfer agents (11%), and payday lenders (4%).
"One in five consumers with a bank account are using alternative banking products, which could add needless cost to their monthly budget," says Ryan Bailey, executive vice-president, head of Retail Deposit and Payment Products, TD Bank. "Consumers who are using these types of services should have a conversation with a banker to learn about less expensive financial products that can meet their everyday financial needs."
When bank customers were asked why they used alternative banking products, amazingly, 16% said they did not have a particular reason for using nonbank financial services.
Centrality of the debit card
Debit cards and online banking play central roles in the banking behaviors of today's consumers. A large percentage of those surveyed reported that their experiences with debit cards and online banking are excellent or very good (92% and 91%, respectively). Of the 23 banking transactions that checking account holders report making each month, on average, ten are debit card purchases and six are conducted through online banking.
Across all survey respondents:
• 60% of checking account owners said their debit card is an essential service.
• An even larger number of millennials (74%) can't imagine not having a debit card.
• When it comes to online banking, 51% of consumers cite it as their preferred channel to conduct checking account transactions.
Human factor still matters
While services like debit cards and online banking are both vital, the Index found that a personal connection remains important to consumers.
When asked about the last time they had a question or concern regarding their checking account, the majority of respondents still rely on a telephone call or a visit to a bank location to have questions answered.
However, behaviors are evolving. Telephone outreach for issue resolution grew almost 9% over the past year (34% in 2013 vs. 37% in 2014) and in-person resolution at a bank location declined by 15% (40% in 2013 vs. 34% in 2014).
What will move a customer elsewhere
The TD Index data also reveals that fees and life events remain major triggers for changing banks.
More than one third (38%) say they would close their primary checking account or consider leaving their bank because of fees. However, only 8% of respondents had closed or switched their primary checking account in the past two years, down from 12% in the 2013.
Of the 8% of respondents who reported closing or switching checking accounts in the past two years, the main reason for doing so was a life event such as moving (29%), followed by bank fees (27%).
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