The nation’s biggest banks are losing customers to smaller local competitors according to a recent survey by J.D. Power and Associates. Between 10% and 11.3% of 5,000 surveyed customers at large, regional, or mid-size banks shopped around for a new bank or new account last year. About one-third of those surveyed said they went looking for a new bank due to the high fees at their current bank.
The proposed debit card fee floated by Bank of America Corp. (NYSE: BAC) probably got the ball rolling for consumers who were fed up with higher costs for getting access to their own money. Other large US banks like Wells Fargo & Co. (NYSE: WFC), JPMorgan Chase & Co. (NYSE: JPM), and Citigroup Inc. (NYSE: C) didn’t make the same mistake, but they couldn’t escape the consumer fallout.
Small banks and credit unions lost just 0.8% of their customers in 2011, down from 8.8% in 2010, according to a report at CNN. The J.D. Power survey indicated that more than 10% of customers who shopped for a new bank chose a small bank. Customers were already dissatisfied with the customer service at the big banks, and combined with the high fees, people voted with their feet.
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