financial services

Confidence In Hometown Banks Is Also Eroding

With financial and economic news continuing to dominate the headlines, it should come as little surprise that consumer confidence in the banking industry continues to decline. But as the issue drags on, consumers are becoming increasingly suspicious of their personal banks as well.

According to market research company Morpace Inc., only 38% of consumers are "very confident" in the banking industry, compared with 44% (already a record low) in the company's September survey. Furthermore, consumer confidence in consumers' personal banks--which had been at 71% in September--fell three percentage points, to 68%.

"Now, we're seeing people lose confidence in their own bank, and that's a big difference," Tom Hartley, vice president of customer loyalty for Morpace, tells Marketing Daily. "I'm interested to see what happens over the next couple of months, because if it keeps declining, we'll be in a place we haven't seen before."

The erosion in confidence is directly related to the headlines of continued pressure on some of the country's best-known banking institutions, Hartley says. As the survey of more than 1,000 consumers was conducted Nov. 17-19, Citigroup was dominating financial headlines for seeking government assistance.

advertisement

advertisement

The declining consumer confidence, however, is not a "big bank vs. a small bank thing," but is an indicator of how far the entire financial services industry has fallen in consumers' eyes.

However, regaining that confidence could be difficult. As the financial industry's turmoil continued, banks have been rolling out messages of reassurance to current and potential customers alike.

Despite that marketing, confidence in people's hometown banks continues to drop. "What the banks [have been] doing is communicating with customers more, through email, ads and other sources," Hartley says. "But that doesn't seem to be working in restoring their confidence."

Next story loading loading..