Wells Fargo, BofA more vulnerable to customer defection, reveals investigation

Wells Fargo and Bank of America are much more vulnerable than other big banks to the threat of unhappy customers transferring their money elsewhere, according to a study released Wednesday.

JPMorgan Chase and Capital One Financial are the companies least likely to flee their clients, giving a high rating to their technology investments, according to a study by management consulting firm cg42.

The study was based on online surveys of 4,050 US consumers at the beginning of the year, looking at the perceptions of 10 of the country's largest banks. The authors of the study predict that 11% of retail banking customers will change their bank in the next 12 months, up from 9.7% in 2013.

"In the last five years, customers have become increasingly frustrated and the number of switches should accelerate," the report says.

According to the study, consumers are increasingly open to the use of online banks and believe that it is easier to change institutions than today.

Wells Fargo and BofA appear to be vulnerable with their own customers for different reasons. Wells, a San Francisco-based company, continues to pay a reputation for its long list of scandals, while Bank of America, based in Charlotte, CN.C.

The United States Bancorp and PNC Financial were the farthest from 2015, when the most recent version of the study was released. The Pittsburgh-based PNC, ranked eighth most vulnerable bank three years ago, finished third this year. The Minneapolis American bank, which was the least vulnerable in 2015, also lost five places in the rankings.

The US bank declined to comment. PNC did not immediately respond to a request for comment. A spokesperson for Bank of America said the bank's customer satisfaction scores are currently at the highest level since monitoring began.

In a statement, Wells said its goal was "to restore trust with all our stakeholders".

"Our goal is to become the leader in financial services for customer service and advice," the bank said. "The most important thing for us is to listen to our customers, understand their needs, respond to their concerns and provide them with exceptional service and advice to help them succeed financially."

Meanwhile, JPMorgan moved from second place in the vulnerability ranking in 2015 to last place this year. New York-based megabank customers were 29% less likely than their counterparts in other banks to say that they had problems with online or mobile banking tools. They were 36% less likely to say that they were experiencing inconsistent service in the branches, by phone and online.

According to the report, Wells Fargo will lose $ 75 billion in net deposits, and Bank of America will lose $ 55 billion in net deposits over the next 12 months.

If these banks lose more deposits than they earn in the next year, it will be in disregard of recent history. BofA deposits increased by 13.9% between the second quarter of 2015 and the same period three years later. Wells Fargo deposits increased 7.3% over the same three year period.

But Stephen Beck, founder and managing partner of CG42, said that Wells and BofA will have to take other measures, such as tighter rate hikes, in order to keep deposits in the absence of a "safe deposit." other changes to alleviate customer frustrations.

"What we were fully expecting in the next 12 months is that the true health of their clientele will weaken, because of what they will have to do to maintain it," he said.

Updated October 10, 2018 at 18:14: The story has been updated to indicate that the US bank declined to comment.
Updated October 10, 2018 at 7:05 pm: The story has been updated again to add comments from a spokeswoman for Bank of America.