J.D. Power and Associates reports: Switching intent among customers increases up to threefold when banks are acquiredMortgagePress.comJ.D. Power and Associates, survey, 2009 Bank Mergers and Acquisitions Report, banks, mergers
The likelihood of customers switching banks increases by up to
three times after their bank merges with or is acquired by another
financial institution, according to the J.D. Power and Associates
2009 Bank Mergers and Acquisitions Report.
"Overall, customers of acquired banks perceive that acquiring
institutions are far less focused on customer interests and
personal service than their previous bank," said Rockwell Clancy,
executive director of financial services at J.D. Power and
Associates. "As a result, these customers are much more likely to
change banks, particularly during the first six to nine months
following the announcement of a merger or acquisition."
The report examines the drivers of customer satisfaction and
dissatisfaction with their new banks following mergers that took
place during the past three years. Using customer satisfaction
scores from the J.D. Power and Associates studies on retail banking
for 2007 and 2008 as benchmarks, the Bank Mergers and Acquisitions
Report compares pre-merger customer satisfaction with current
satisfaction levels and identifies opportunities for improvement in
the merger process. The report also provides a snapshot of
perceptions and attitudes of customers of Chase/WaMu; Wells
Fargo/Wachovia; PNC/National City; and Capital One/Chevy Chasewhich
are currently undergoing mergers.
Among customers of financial institutions that have fully
consummated mergers during the past three yearsincluding Regions
Bank/AmSouth; Bank of America/LaSalle Bank; Capital One/North Fork
Bank; TD Bank/Commerce Bank; and Huntington National Bank/Sky
Bankpost-merger dissatisfaction is primarily driven by three
factors:
• Magnitude and number of changes made to customer banking
activities
• Types of changes made to routine customer banking
activities, such as changes in bank hours, fees or automatic
payment or debit functions
• Communication about impending changes to customer banking
activities
Among customers of banks that are currently undergoing an
acquisition, fewer than one-half report that they are receiving a
sufficient amount of information from their financial institution
about the merger. Furthermore, when customers find out about the
merger from a source other than their financial institutionsuch as
the media or a friend or family memberthey are twice as likely
switch banks, compared with customers who report receiving merger
or acquisition communications directly from their bank.
Approximately 75 percent of customers of these merging banks state
that they received information about the mergers from a third
party, rather than their bank. This figure is twice that of
customers of banks that have fully consummated mergers.
"Customers who are uneasy about their financial institution's
merger present a sizable opportunity for competitors," said Clancy.
"Conveying messages about the competing bank's stability and
reliability and not subjecting the customer to unpleasant surprises
will resonate with this group and could potentially result in new
business."
The 2009 Bank Mergers and Acquisitions Report is based on
responses from 3,111 customers evaluating 17 banks. The report was
fielded in February 2009.
For more information, visit www.jdpa.com.
