It's popular to blame big banks for the problems within America's financial system, but does that blame turn into lack of trust with our money? If we don’t trust big banks to hold our money, what are our alternatives? A recent MoneyTips survey dove into America's banking habits and preferences, especially with respect to attitudes toward the largest banks. The results show Americans have some concerns with large banks, but trust is not necessarily the largest issue.
For survey purposes, five big banks were chosen as the reference set: Wells Fargo, Bank of America, U.S. Bank, Chase, and Citibank. Respondents who do use one of those five banks prefer Bank of America and Chase, with 37% and 34% usage rates respectively. However, 38% of survey respondents said that they do not use any of the five big banks, and another 28% only use them to handle some of their banking needs.
Lower income and higher age seem to correlate to the use of alternatives to bigger banks. 45% of respondents making less than $30,000 do not use the big banks, but that percentage continues to drop along every bracket through the $201,000 to $500,000 range, where 14% of respondents never use the big banks. Meanwhile, 34% of respondents from ages 19 to 29 do not use the big banks, and that percentage increased in the higher age brackets up to 48% of respondents between ages 50 to 69.
Those who prefer an alternative to the big banks seem to favor smaller local banks (46% of respondents) while 41% use credit unions and another 31% use online banks. The small bank preference holds solid at 33%-36% across all age groups from 19 to 59.
Even though a whopping 94% of respondents say that big banks are either mostly or partly to blame for the recent financial recession, and 92% consider our financial system somewhat shaky or very unstable, only 13% of those using smaller banks say that they don't trust the larger ones. 34% simply prefer patronizing their smaller local counterparts, 29% cited too many fees as the reason they avoid big banks, and 24% find big banks inconvenient compared to other banking choices.
A sizable majority of respondents may believe that big banks did not learn their lesson, given that 91% of them expect and believe that another financial crisis will occur within the next fifteen years — although 34% believe that the crisis is not imminent and will only take place ten to fifteen years from now.
The survey results indicate that while we may have concerns over big banks and the overall financial system, few of us are motivated to change our habits as a result. Of all the respondents who use alternates to the big banks (smaller local banks, credit unions or online banks), 89% of them had no plans to change their banking habits in the coming year. 79% of respondents who use the big banks also do not plan to change their banking habits. At least younger respondents are willing to change their mind, since only 43% of 19 to 29 year olds say they will stick with their current bank.
In summary, the survey shows that Americans who have a preference for smaller banks compared to the larger ones, believe that the big banks were at least partly to blame for the Great Recession, and that our less-than-stable financial system is likely to see another financial crisis within the next fifteen years.
Even so, our issues with the big banks have more to do with traditional customer service issues of fees and convenience than with trust, and many customers simply prefer to support their smaller local banks. Perhaps big banks could increase their market share with better customer service and local outreach efforts. Greater trust in the big banks would likely follow.
Take a look at our infographic to see a visual summary of the banking habits and preferences revealed in the MoneyTips survey.