Recession's Effects On Bank Customers

Big banks are realizing they may actually have to pay attention to customers to keep them.


An unprecedented number of people dumped billion-dollar institutions for smaller banks in 2011, a new report from Javelin Strategy and Research shows. The big switch came as anti-bank rage swelled, driven by the Occupy movement, Bank Transfer Day -- and the $5 monthly debit card fee that Bank of America abandoned last fall after a storm of outrage.

"Banks have to start serving clients and really serve them, rather than serving themselves," Citigroup CEO Vikram Pandit said in a Bloomberg interview in Davos, Switzerland, on Thursday.

Of the 5.6 million people who switched banking institutions from September to December, 11 percent said they cut ties with their big bank because they “wanted to move to a credit union or community bank” and were fed up with fees, according to a survey analysis by Javelin, a financial research firm. In previous quarters, the number of adults who expressed that sentiment was so small the research company couldn't make a reliable comparison.

The final data from 2011 showed that more people stayed put than moved. But of those who moved, "it was a surge" from big institutions to smaller ones, said Jim Van Dyke, founder of Javelin.

Big banks are now trying to win back good will and customer revenue.