SCOTTSDALE, Ariz.–Eight-in-10 consumers believe their checking account is either a “good” or “great” value—although opinions are influenced by whether or not the account is free and which type of institution holds the account, according to new research.
In a posting on Cornerstone Advisors’ website, Ron Shevlin, director of research, said research he has conducted regarding consumer perceptions of checking accounts relative to other services found consumers far more optimistic than he had anticipated, which he said was a “surprise.”
“Overall, 42% of consumers think their checking account is a great value, and 38% consider it a "good" value,” wrote Shevlin. “Not surprisingly, perceptions vary by whether or not someone has a free checking account—45% of free account holders said their accounts were a great value versus a third of fee-based account holders.”
Shevlin said the research found consumers whose primary checking account is with a credit union were far more likely to think their account was a great value than consumers who bank with a megabank, or another type of financial institution.
“The differences in perceptions by type of account at the primary FI level is interesting,” observed Shevlin. “Among consumers who bank with a credit union, community bank, or large regional bank, there was a big gap in value perception between free account holders and those with a fee-based account. Among megabank customers, however, there was hardly any gap.”
Shevlin said he also found significant differences by generation, as well. “Despite the fact that 56% of Millennials have their primary checking account with a megabank, those who bank with a credit union were far more likely to say their account was a great value than Millennials banking with a megabank,” wrote Shevlin.
Bragging Rights, But…
Shevlin added the results provide credit unions with some great bragging rights. “What good it will do, I'm not so sure,” he said. “With more than half of Millennials choosing megabanks, what's the message here? That Millennials don't care about value? Do Millennials who choose megabanks not care that their friends who choose a credit union are twice as likely to think the credit union's checking account is a great value?”
Shevlin said the other “worrisome aspect” is that value perceptions are a poor predictor of cross-sell and referral behavior.
The full posting can be found here.