Survey Finds Banking Experience is Improving, But Consumers Are Missing Easy Savings Opportunities
Despite having a checking account, 22 percent of Americans report using alternative banking products like cash checking services
CHERRY HILL, N.J., Sept. 25, 2014, TD Bank, America’s Most Convenient Bank®, today released its second annual TD Bank Checking Experience Index, which found that the banking experience of Americans has improved year over year. According to the Index, 86 percent of consumers rate their day-to-day experience with their checking account as excellent or very good (compared to 83 percent in 2013) and 85 percent of consumers say their bank is excellent or very good when it comes to accessibility (compared to 83 percent 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.
Although consumers are generally happy with the services provided by their banks, 22 percent 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 percent), money transfer agents (11 percent) and payday loans (4 percent). When bank customers were asked why they used alternative banking products, 16 percent said they did not have a particular reason for using non-bank financial services.
“One in five consumers with a bank account are using alternative banking products, which could add needless cost to their monthly budget,” said 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.”
Banking Behaviors Continue to Evolve 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 percent and 91 percent, respectively). Of the 23 banking transactions that checking account holders report making each month, on average, 10 are debit card purchases and six are conducted through online banking.
Across all survey respondents, 60 percent of checking account owners said their debit card is an essential service. An even larger number of Millennials (74 percent) can’t imagine not having a debit card. When it comes to online baking, 51 percent of consumers cite it as their preferred channel to conduct checking account transactions.
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 percent over the past year (34 percent in 2013 vs. 37 percent in 2014) and in-person resolution at a bank location declined by 15 percent (40 percent in 2013 vs. 34 percent in 2014).
Triggers for Switching Banks Include Life Events and Fees The TD Index data also reveals that fees and life events remain major triggers for changing banks. More than one third (38 percent) say they would close their primary checking account or consider leaving their bank because of fees. However, only eight percent of respondents had closed or switched their primary checking account in the past two years, down from 12 percent in the 2013. Of the eight percent 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 percent), followed by bank fees (27 percent).
Advice for Consumers Based on the results of the Index, Bailey offered advice to help consumers improve their banking experience while getting the most out of their checking accounts:
- With 60 percent of Americans saying they can’t imagine not having a debit card, consumers should have a plan of action if their card is misplaced or stolen. They should check to see if their bank offers on-the-spot debit card replacement and access to 24/7 customer service.
- Only 13 percent of Americans are using reloadable prepaid cards. This relatively new product category offers many of the benefits of a checking account, such as the ability to receive a paycheck through direct deposit and to make purchases online, and can serve as an introduction to banking for the population that currently depends on alternative financial service providers.
- Nearly two thirds (62 percent) of Americans say their bank is offering products and services that take advantage of new technologies like mobile apps and mobile deposit. That means that 38 percent of account holders may not be enjoying the conveniences that modern banks are providing. Consumers who want access to the latest banking technologies may want to consider trying a bank that offers their customers the ability to manage their finances in more ways.
Survey Methodology The study was conducted among a nationally representative group of consumers from August 25 through September 1, 2014. The sample size of 1,510 consumers has a margin of error of +/- 2.5 percent. The survey was hosted by global research company Angus Reid Public Opinion.
About Angus Reid Public Opinion Angus Reid Public Opinion is the Public Affairs practice of Vision Critical—a global research company. Vision Critical is a leader in the use of the Internet and rich media technology to collect high-quality, in-depth insights for a wide array of clients.
About TD Bank, America’s Most Convenient Bank TD Bank, America’s Most Convenient Bank, is one of the 10 largest banks in the U.S., providing more than 8 million customers with a full range of retail, small business and commercial banking products and services at approximately 1,300 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Bank and its subsidiaries offer customized private banking and wealth management services through TD Wealth®, and vehicle financing and dealer commercial services through TD Auto Finance. TD Bank is headquartered in Cherry Hill, N.J. To learn more, visit www.tdbank.com. Find TD Bank on Facebook at www.facebook.com/TDBank and on Twitter at www.twitter.com/TDBank_US.
TD Bank, America’s Most Convenient Bank, is a member of TD Bank Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services company in North America. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol “TD”. To learn more, visit www.td.com.