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Two-thirds of Adults Prefer Community FIs to Big Banks
Monday, March 23, 2015 6:45 AM

A recent Credit Union Journal article reports that two-thirds of adults in the U.S. would rather use a credit union or community bank instead of a big national bank.

The January 2015 Consumer Banking Insights Study, commissioned by BancVue on behalf of nearly 300 community financial institutions (CFIs) and conducted online by Harris Poll, documented the answers of more than 1,000 U.S. adults (ages 18 and up with a checking account at a financial institution), and came up with those interesting results.

The bad news: only 23 percent of those consumers who are not currently banking at a CU or a community bank say they are at least "somewhat likely" to switch in 2015.

Consumers cited a lack of products and awareness (11 percent each) as two reasons for not using a CFI as their primary institution. Features such as free checking, ATM fee refunds and access to the latest banking products are more important when it comes to choosing an FI than the banking institution that provides them, according to the study.

Fully 31 percent of megabank customers (defined as checking account holders who consider one of the big national banks to be their primary banking institution) said they want to use a credit union or local community bank but feel those institutions lack the products they need.

Lack of awareness is an even bigger factor when it comes to Millennials (ages 18 to 34). Millennials who don't have an account with a CFI are more than twice as likely to say they don't use a local one because they are unaware of their options (18 percent), than 35-54 year olds (8 percent) and adults 55 and up (7 percent).

"The study's results make it clear that, for community financial institutions, stronger marketing efforts and better products are the key to growth," Gabe Krajicek, BancVue's CEO, said in a statement. "If community banks and credit unions offer consumers the innovative services they want, they'll switch. It's as simple as that."