U.S. Financial Institutions
U.S. Financial Institutions
Thrift Institutions
A thrift institution is a depository institution formed specifically to encourage household saving and to make home mortgage loans. Thrift institutions include savings and loan associations (S&Ls) and savings banks. S&Ls keep large percentages of their assets in home mortgages. Compared with S&Ls, savings banks focus less on mortgage loans and more on stock and bond investments. Thrifts are declining in number. At their peak in the late 1960s, there were more than 4,800. But a combination of factors, including sharp increases in interest rates in the late 1970s and increased loan defaults during the recession of the early 1980s, has reduced their ranks significantly. By year-end 2016, due mostly to acquisitions by or conversions to commercial banks or other savings banks, the number of thrifts had fallen to fewer than 800.
Top Ten Insured U.S.-Chartered Commercial Banks, Based on Consolidated Assets, 2016
| Bank | Consolidated Assets |
|---|---|
| 1. JP Morgan Chase & Co. | 2,082,803,000 |
| 2. Wells Fargo & Co. | 1,727,235,000 |
| 3. Bank of America Corp. | 1,677,490,000 |
| 4. Citigroup | 1,349,581,000 |
| 5. U.S. Bancorp | 441,010,000 |
| 6. PNC Financial Services Group | 356,000,000 |
| 7. Capital One Financial Corp. | 286,080,000 |
| 8. TD Bank North America | 269,031,000 |
| 9. Bank of New York Mellon Corp. | 257,576,000 |
| 10. State Street Bank and Trust Corp. | 239,203,000 |
Rating Banks: Mobile and Branch Banking a Must
Which banks provide the best customer satisfaction? J.D. Power (JDP), based in Costa Mesa, California, ranked 136 major banks in 11 U.S. regions based on responses from more than 78,000 retail banking customers. In the research company's 2017 U.S. Retail Banking Satisfaction Study, top performers received high ratings in account information, channel activities (such as branch, mobile, website, and ATM), fees, problem resolution, and product offerings.
While specific banks took the top spots in various areas of the country, the overall customer sentiment in the JDP survey was clear: consumers wants banks that offer both digital experience and personal interaction in local branches – and the ones that can make these two channels work together effortlessly will be the most successful, especially among millennials. Findings also suggest banks that provide a user-friendly digital experience will attract and retain customers, and this digital experience must work seamlessly with a local branch system as younger customers avail themselves of other banking services such as mortgages and wealth management in the future. Other key survey findings include:
- Regardless of age group, more customers than ever are using mobile banking.
- More than 70 percent of all customers visited a local branch an average of 14 times over the past year, and their overall satisfaction was 27 index points higher than those who did not visit a bank branch.
- Close to 65 percent of bank customers have mobile payment services linked to their accounts.
- Successful problem resolution is a key driver of customer satisfaction, and younger customers prefer to resolve issues online or via social media.
Assessing customer satisfaction is also the goal of the American Customer Satisfaction Index (ACSI), which granted Citibank the top spot in the national bank category in its most recent survey, with a 12 percent jump in its overall score. Other top super regional banks in the ACSI study include BB&T, Fifth Third Bank, Capital One, and Citizens Bank. Overall, national banks improved their overall customer experience the most, up more than 6 percent from ACSI's previous survey.
Critical Thinking Questions
- What can banks and financial institutions do to retain their customers and make them feel valued?
- Is there a cost involved in not making customer service a priority? Explain your answer.