A new report from Javelin Strategy & Research indicates 11% of consumers are likely to switch primary financial institutions in 2012. Giant banks face even larger defections, with Citibank and Bank of America at risk of losing twice as many customers.

The Javelin FI Vulnerability Index estimates huge potential losses for financial institutions because switchers manage $675 billion in deposits, and manage deposits that are 30% higher than customers who are unlikely to switch.

Likely switchers also are willing to pay an estimated $92 million in fees for just four value-added services: money orders, cashier's checks, safe-deposit box rentals, and mobile deposit.

"Bank Transfer Day was a bust, but financial institutions of all sizes can learn from it," says Mark Schwanhausser, senior analyst, Multichannel Financial Services at Javelin. "Our Bankographic Benchmark research shows that banks are still in danger of losing customers to financial institutions that can better respond to their needs, especially in the areas of mobile banking and self-service technology. With $675 billion of deposits and $92 million in fee revenue at play, smaller banks and credit unions really have the opportunity to win new customers."

"Ultimately, consumers are driven by convenience more than fees and protests," says Jim Van Dyke, president, Javelin. "Giant banks will need to drive home their messaging around convenience, mobile banking, and other services that smaller banks don't—or can't—offer. Smaller banks can play to their strengths of lower fees, convenience, and customer service, but they will need to beef up their mobile banking and mobile deposit offerings."

Selected findings of the report include:

•    More than half of recent switchers are under 35 years of age and use mobile technologies (smartphones and tablets) frequently.

•    Mobile banking has emerged as a compelling factor for switchers, as they more than twice as likely as all consumers to use mobile banking.


https://www.javelinstrategy.com/news/1341/92/Javelin-Warns-675-Billion-in-Deposits-at-Risk-Due-to-Bank-Switching/d,pressRoomDetail

[This article was posted on July 2, 2012, on the website of ABA Banking Journal, www.ababj.com.]         

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