Big Banks Could Lose $185 Billion Next Year, As Anger Builds: Research

Before you go, we thought you'd like these...
Before you go close icon
Big banks risk losing as much as $185 billion in the next 12 months as account holders say no to being nickeled and dimed, according to a new report by boutique management consulting group cg42. Bank of America, Chase, Citibank, Wells Fargo could make up nearly three-quarters of that loss, the survey said.

For consumers looking to hit banks back, the sobering news is that $185 billion represents about 9% of total retail bank deposits. Together the top 10 largest banks hold more than $2 trillion.

The survey looked at the brand vulnerability at the top 10 retail banks in the United States, surveying 5,600 customers in June 2011. Their number one frustration: Fees. They are fed up.

Too bad fees are what the banks -- similar to the airlines -- are specializing in these days. Even as banks have dropped debit-card fees, dollar by dollar they are adding it up elsewhere to keep the much-needed revenue coming. There are fees to get a replacement card, or get cash wired to your account, or make a mobile deposit, or get an extra paper statement.

In fact, banks must recoup at least $15 to $20 monthly per depositor in order to earn what they did in the past, according to recent story in the New York Times. Meanwhile, it costs banks between $200 to $300 per customer to cover everything from staffing branches to covering insurance premiums, the story also reported.

But that is not the only gripe. In the survey, other customer frustrations included not being offered competitive rates, being hit with overdraft changes and that banks were making promises they don't keep.

"These frustrations are driving vulnerability," said Stephen Beck, the founder of cg42.

While anger about fees united how people felt about all the institutions, each bank had unique challenges, he added.

For example, Wells Fargo customers complained that the bank tried to sell them on products they didn't want or need, while nearly 50% of Bank of America customers reported that they preferred to minimize human contact and use more technology over in-person transactions. CapitalOne customers reported being frustrated with basic customer service issues. PNC and SunTrust were the least vulnerable to losing customers according to the survey.

Where that that $185 billion goes is still the big question. Already nearly $5 billion in new deposits has appeared in credit union coffers in the last six weeks.

Catherine New can be reached at catherine.new@huffingtonpost.com.
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners