Jim S Miller

Thoughts on the Client Experience and Banking

Harris Bank Ranked Most Reputable Bank in U.S., Capital One Ranked Least – The Most Reputable U.S. Banks 2011

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According to American Banker’s second annual survey on bank reputation, conducted by the Reputation Institute, Harris Bank is the most reputable bank in the U.S.  Harris Bank topped the list with a score of 73.09, which represents an increase of 8.24 over 2010.  Zions Bank, scoring 70.22, was the only other bank with a score above 70 (the cutoff the Reputation Institute uses to define a Strong/Robust reputation).  Charles Schwab, 69.99 and Ally Bank, 68.80, ranked third and fourth respectively.  Filling out the bottom 3 places on the list were Bank of America, 53.40, Citibank, 52.22 (in spite of an 8.58 point increase from 2010, the largest increase of any bank) and Capital One, 50.52.

The Reputation Institute conducted online surveys in January and February 2011 to rate the largest U.S. banking holding companies.  The ratings on bank reputation were based on respondents who said they were “familiar” or “somewhat familiar” with the company they rated.  Scores were calculated across seven dimensions; Products and Services, Innovation, Workplace, Governance, Citizenship, Leadership and Financial Performance. 

I have not seen the questionnaire for this study, but if I were a respondent of the survey, I would have a hard time answering questions about a bank’s financial performance, innovation, workplace, governance, citizenship, products/services and leadership.  Answering questions about these aspects of a bank would be especially challenging if I were not a customer and had to base my answers on being “familiar” or “somewhat familiar” with the bank.

Harris Bank scored the highest in four of the dimensions, and in the top three in the remaining dimensions.  I don’t doubt that Harris Bank has a strong reputation, but I doubt respondents can accurately judge a company’s strengths in these areas.  If they could, you would likely see more variety in the top banks across the seven dimensions.  I believe you would have seen similar overall rankings if respondents had simply been asked to rate each bank’s reputation.  It is likely the respondents’ overall opinion of the bank is influencing how they answer each of the questions asked to derive the dimension scores, especially when they are only “somewhat familiar” with the company.

The American Banker reputation report includes a graph showing the strong correlation between reputation ranking and the percent of respondents who would recommend the bank.  The chart shows that a 5 point improvement in reputation results in an increase in recommendation by 6.6%.  I agree that a bank’s reputation and the likelihood of consumers to recommend the bank are highly correlated; but I do find it a bit strange to look at the likelihood of non-customers to recommend a bank.  After all, if non-customers do recommend a bank, why are they not a customer there? 

The real question is how a bank influences its reputation.  This study does give some insights.  Behind the scenes, having a desirable workplace, strong corporate governance, strong leadership and healthy financial performance do help.  Providing products and services that meet the customers’ needs is also important as well as remaining innovative… although I don’t think banks need to be leaders, but rather remain competitive in innovation. 

The two components that are missing from this study, and probably the greatest drivers of reputation, are a strong customer focus and effective marketing.  Making customers a priority, and providing a high level of customer service helps banks build a strong reputation which is typically driven by word of mouth.  Once banks have proven they care about their customers, marketing provides a multiplier effect (as you can see from some of the large banks at the bottom of the list, particularly Capital One, marketing cannot overcome a poor customer experience).

Bank Rankings:

Rank

Company

2011

2010

Change

1

Harris Bank

      73.09

        64.85

8.24

2

Zions Bank

      70.22

        64.05

6.16

3

Charles Schwab

      69.99

        66.23

3.77

4

Ally Bank

      68.80

        66.34

2.46

5

BBVA

      68.49

        62.90

5.59

6

M&I Bank

      68.43

        65.14

3.29

7

ING Direct

      67.82

     –

8

E-Trade

      67.37

     –

9

Bank of the West

      67.08

        65.73

1.35

10

BB&T

      66.94

        66.29

0.65

11

Huntington Bank

      66.43

        62.73

3.70

12

TD Bank

      66.27

        64.72

1.55

13

KeyBank

      66.06

        57.55

8.51

14

Union Bank

      65.60

        63.33

2.26

15

Regions

      65.49

        65.96

-0.47

16

SunTrust Banks

      64.85

        68.10

-3.25

17

Comerica

      64.80

        60.30

4.50

18

Citizens Bank

      64.45

        63.55

0.90

19

M&T Bank

      63.45

        61.77

1.68

20

PNC

      62.09

        65.05

-2.96

21

HSBC

      61.30

        56.61

4.68

22

Morgan Stanley

      60.51

        52.48

8.04

23

Fifth Third Bank

      60.42

        61.85

-1.43

24

US Bancorp

      60.31

        55.52

4.79

25

Chase

      59.79

        61.76

-1.98

26

Wells Fargo

      57.82

        56.90

0.92

27

Sovereign Bank (Santander)

      57.48

     –

28

Bank of America

      53.40

        51.62

1.79

29

Citibank

      52.22

        43.65

8.58

30

Capital One Financial

      50.52

        52.72

-2.20

 

Leaders by Dimension:

Products

  • Zions Bank
  • Harris Bank
  • M&I Bank
  • Ally Bank
  • ING Direct

Innovation

  • Ally Bank
  • E-Trade
  • Harris Bank
  • Zions Bank
  • M&I Bank

Workplace

  • M&I Bank
  • Zions Bank
  • Harris Bank
  • Bank of the West
  • TD Bank

Governance

  • Harris Bank
  • Zions Bank
  • Ally Bank
  • M&I Bank
  • Citizens Bank

Citizenship

  • Harris Bank
  • Zions Bank
  • M&I Bank
  • Comerica
  • Bank of the West

Leadership

  • Harris Bank
  • Zions Bank
  • M&I Bank
  • BBVA
  • Comerica

Financial Performance

  • Harris Bank
  • Zions Bank
  • Ally Bank
  • ING Direct
  • E-Trade
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