Wells Fargo, BofA most vulnerable to customer defection, survey finds

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Wells Fargo and Bank of America are far more vulnerable than other large banks to the threat that unhappy customers will move their money elsewhere, according to a study released Wednesday.

JPMorgan Chase and Capital One Financial are the least susceptible to fleeing customers, scoring high marks for their investments in technology, the study by the management consulting firm cg42 found.

The study was based on online surveys of 4,050 U.S. consumers earlier this year looking at the perceptions of 10 of the nation's largest banks. The authors of the study project that 11% of retail banking customers will switch banks within the next 12 months, up from 9.7% in 2013.

“Over the past five years, customers have become more frustrated, and switching is projected to accelerate,” the report states.

According to the study, consumers are increasingly open to using online-only banks, and they believe it is easier to switch institutions today than it used to be.

Wells Fargo and BofA appear to be vulnerable with their own customers for different reasons. San Francisco-based Wells continues to pay a reputational price for its long list of scandals, while Charlotte, N.C.-based Bank of America is at risk because of concerns about rates, fees and customer service, the study found.

U.S. Bancorp and PNC Financial fell the furthest from 2015, which is when the most recent previous version of the study was released. Pittsburgh-based PNC, which was rated the eighth most vulnerable bank three years ago, finished third this year. Minneapolis-based U.S. Bank, which was the least vulnerable in 2015, also fell by five spots in the rankings.

U.S. Bank declined to comment. PNC did not immediately respond to a request for comment. A Bank of America spokeswoman said that the bank's customer satisfaction scores are currently at the highest level they have reached since tracking began.

In a statement, Wells said its focus is on "restoring trust with all of our stakeholders."

"We have set a goal of becoming the financial services leader in customer service and advice," the bank said. "What’s most important to us is listening to our customers, understanding their needs, addressing any concerns, and providing them with exceptional service and guidance to help them succeed financially."

Meanwhile, JPMorgan improved from second in the vulnerability rankings in 2015 to last place this year. Customers of the New York-based megabank were 29% less likely than their peers at other banks to say that they were having trouble with online or mobile banking tools. They were 36% less likely to say that they encountered inconsistent service in branches, over the phone and online.

The report projects that 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 those banks lose more deposits than they gain over the next year, it will be in defiance of recent history. BofA’s deposits grew by 13.9% between the second quarter of 2015 and the same period three years later. Wells Fargo's deposits grew 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 steps, such as raising rates more aggressively, to hang on to deposits in the absence of other changes that alleviate customer frustrations.

“What we would fully expect over the next 12 months is that the true health of their customer base will become weaker, because of what they’ll have to do to maintain it,” he said.

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Customer experience Customer service Deposits Consumer banking Wells Fargo Bank of America JPMorgan Chase Capital One U.S. Bancorp PNC Financial Services Group