Jim S Miller

Thoughts on the Client Experience and Banking

ING Direct and Bank of the West Top Bank Reputation Survey

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According to the 2012 American Banker/Reputation Institute Survey, ING Direct has the best reputation of the 30 banks included in the survey. Rounding out the top 5 are Bank of the West, BBVA, Comerica and Ally Bank. Last year’s winner was BMO Harris Bank, which dropped 8 points (on a 100 point scale) falling to 7th overall. Bank of America ranked 28th last year, but their score dropped over 9 points putting them firmly into last place in this year’s survey.

Each bank was ranked by at least 100 people who reported having some level of familiarity with the brand. While some customers ranked banks with which they have direct experience, a majority of the surveys are from people who do not deal with the bank directly.

The reputation scores in the study are derived from survey responses that speak to what Reputation Institute identifies as the seven dimensions of corporate reputation. These are the perceptions consumers have about a company’s citizenship, financial performance, governance, innovation, leadership, products and services, and workplace environment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

My thoughts on this survey….

It is interesting that the top four banks in last year’s survey experienced significant increases from 2010 to 2011, followed by a decline in scores in 2012. Take a look at the three-year trends for Harris Bank, Zions Bank, Charles Schwab and Ally Bank. After a large increase in 2011, in 2012 they are all within one point (on a 100 point scale) of their 2010 score. It makes sense to me that Bank of America’s scores declined by almost 10 points from last year due to the negative press about debit card fees, mortgages and their financial performance, but it seems unlikely that the top four banks from last year would all see their reputation scores drop back to their 2010 levels. As I mentioned above, each bank received a minimum of 100 surveys. I don’t know how many surveys each bank had or the total number in the study. At the minimum of 100, the margin of error is over 9 points. This may account for some of the annual changes in scores.

There are two schools of thoughts on the best way to measure reputation. One is to simply ask people to rate the overall reputation of firms they are familiar with. This allows the consumer to base their opinion on whatever is important to them. The other is to ask consumers to rate firms on a series of different attributes. This is the approach used in this survey by the Reputation Institute. They ask people to rate a company based on seven attributes; citizenship, financial performance, governance, innovation, leadership, products and services, and workplace environment. The advantage to this methodology is that it can give additional insight into why a company has a good or bad reputation. Conceptually I agree with this (it is nice to measure reputation, but better to understand what drives reputation), but I have questions about how well a typical consumer can rate a company on these attributes. This is especially true when people try to rate firms with which they do not have direct experience. I have been in banking for over 20 years and I would find it hard to rate some banks that I am very familiar with on these attributes. How many consumers keep up with the financial performance or governance of a bank they don’t deal with? How can consumers accurately rate a company’s leadership or workplace environment? Without knowledge about these areas, survey respondents end up answering all of the questions based on their overall impression of the company. If they think the company generally has a good reputation, they score each attribute high. In the end, it probably comes out the same as if the survey had asked them to rate based on overall reputation. The danger is that it gives a false sense about how a company scores on the individual attributes.

It would be interesting to add a question to this survey, which is how likely are you to considering opening your next account at each bank. The online banks score well in this survey, yet we know most customers choose a bank based on the location of the branches. Reputation is an important asset of any firm, but leveraging that reputation to gain new customers and retain existing ones is the key driving the bottom line.

 

Related post: https://jimsmiller.com/2011/05/25/harris-bank-ranked-most-reputable-bank-in-u-s-capital-one-ranked-least-the-most-reputable-u-s-banks-2011/

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Written by Jim S Miller

June 26, 2012 at 7:13 pm

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