LAKE FOREST, Ill.–All financial institutions—but especially credit unions–continue to provide inconsistent and often inaccurate information on their fees, rates and products both online and over the phone—and the problem is getting worse, according to a new study.
The study, which included fintechs, found credit unions making more mistakes than banks.
Moebs $ervices has completed its second study on Website and Branch Accuracy, which examines if what an organization shares over the phone is consistently reflected on the website, and vice versa.
The studies in 2018 and now in 2019 found a significant mismatch in the information provided via those two channels at many FIs—finding website data was consistently outdated or simply inaccurate, and that branch staff are also often misinformed or not informed at all when changes are made on the site.
“We were just shocked at what we found, or more importantly, what we did not find in our December 2018 survey. So we repeated the survey again in June 2019, and things got worse,” said Michael Moebs, economist and CEO of Moebs $ervices, which shared the previous report via CUToday.info. “Less than half the time the average consumer cannot get accurate information on fees, rates, or balances at banks, thrifts, credit unions or fintech firms.”
A ‘Major Crisis’
Moebs called the issue a “major crisis in financial services.”
“How can the consumer know what they are paying for if there is such a sharp mismatch between what they see on the website and what they are told on the phone?” he said.
Moebs explained the survey team of 12 people, all with more than seven years’ experience, concluded credit unions are the biggest offenders.
Moebs suggested credit unions have been very aggressive in 2019 in seeking to win business away from the banks, and that has led to website and call center errors as a result.
“This is especially true with deposit rates,” he said. “CUs have moved rates higher, as we previously reported in CUToday.info. However, in the process of being more aggressive and going after growth, this has caused two problems for them.”
The first problem, according to Moebs, is credit unions have not adequately trained their employees on the information contained on their websites.
“Plus, the strong move to make rate changes often leaves their own employees unaware of their prices, even on basic shares,” he said.
Just like banks and fintechs, CUs have gotten worse since 2018 in sharing accurate data, he said.
The second problem is related to a core offering, according to Moebs.
Another Loose End
“A big loose end, too, for credit unions, is checking accounts, where the cooperatives have made some rapid changes recently,” explained Moebs. “Their employees often don’t know the features of the checking accounts offered—they may know one checking type but not the others.”
All financial institutions greater than $500 million in assets were included in the Moebs $ervices study. A statistical sample of all institutions under $500 million was completed by George Easton, Professor of Mathematics and Statistics at Emory University in Atlanta.
Questions were asked related to the rates offered on savings or shares, money market deposit accounts, and 12-month certificates of deposits. In addition, the fee price for an overdraft was sought, as well as the type of checking accounts offered, and minimum balances required on deposits.
“Every piece of data was audited. Every website was investigated twice. Every branch or call center was phoned two to three times,” said Moebs. “The variance on the accuracy was less than ±1.00%.”
A ‘Serious Problem’
The Moebs Services Study of Website and Branch Accuracy identifies a serious problem at all financial institutions, asserted Moebs.
“You have a serious problem when consumers can only get accurate information on MMDAs less than 50% of the time. MMDAs represent 50% of all deposits ($6 trillion) in the nation,” noted Moebs.
Making the website the primary resource for information on financial services offerings, including features and pricing, is the solution, said Moebs.
“Ultimately banks, thrifts, credit unions and Fintech firms need to clean up this mismatch of information or let Washington and the state legislatures do it for them,” said Moebs.