As the COVID-19 response continues to develop, consumer loyalty appears to lie where there money isA recent survey from New research from DepositAccounts.com shows that consumers will mostly remain loyal to banks while some have wavering faith in government
CHARLOTTE, N.C., May 18, 2020 /PRNewswire/ — DepositAccounts.com has released the findings of its latest survey on consumer confidence in both banking institutions and the U.S. government during the COVID-19 pandemic. On the whole, the survey shows that Americans largely seem to trust their banks in this time of crisis with 78% of consumers have at least some trust in their banks to do right by consumers. In comparison, just under 64% of respondents have some level of trust in the government to do the same.
Americans trust banks to do right by consumers during the coronavirus pandemic more than they trust the government to do the same. Of survey respondents, 40% said they trust their bank “a lot,” while just 27% expressed the same level of confidence in the government.
Half of respondents said they are more likely to stick with their bank because of its response to the COVID-19 crisis.
- Millennials and Gen Xers are most likely to feel more loyal to their bank because of the coronavirus pandemic.
- Only 8% of respondents indicated that they are more likely to switch to another bank due to their current bank’s response to the pandemic.
Gen Z is more skeptical of their banks than any other age group. Nearly 30% of Gen Z respondents said they don’t trust their bank to do the right thing during the COVID-19 crisis, compared to 18% of millennials, 11% of Gen X, 14% of baby boomers and 8% of the silent generation.
- Notably, 17% of Gen Zers plan to switch to another bank because of their current bank’s response to the COVID-19 crisis, versus 12% of millennials, 7% of Gen X, just under 2% of baby boomers and 1% of the silent generation.
- Most consumers are optimistic that their bank will survive the pandemic. Specifically, 61% are “extremely” confident and 29% are “somewhat” confident in their bank’s survival.
Seniors More Confident Than Younger Consumers
Older Americans are generally more confident than younger age groups. Higher earners also have greater confidence in their banks’ survival than lower-income individuals. Meanwhile, more than 1 in 4 consumers aren’t that confident that the Coronavirus Aid, Relief and Economic Security (CARES) Act is providing relief and stimulating communities. Women are much less confident in the government rescue package than men — about 58% of women are either “very” or “somewhat” confident in the CARES Act, compared to 74% of men.
Gen X is the generation with the most confidence in the CARES Act, with 75% of Gen X respondents expressing some level of confidence in the relief package. Millennials were the next most confident at 70%, while about half of the other generation groups expressed any confidence in the CARES Act.
Overall, Republicans trust the government to do right by consumers, compared to only about half of Democrats and Independents.
The largest group that did not trust the government at all identified themselves as “Other” when asked for their political affiliation, meaning they did not identify as part of the Republican, Democratic or Independent parties.
Income-level divides when it comes to bank help and trust
Lower-income individuals are seeing less help from their banks. Of respondents who make less than $25,000, 65% have not been offered any form of assistance during the coronavirus pandemic. Meanwhile, that number is cut in half for folks who make $100,000 or more. Individuals with lower incomes are already less likely to benefit from higher deposit interest rates, which are often reserved for big balances — especially at traditional banks. Lower-income folks also are more likely to pay bank account fees, from monthly service fees to overdraft fees. Only 19% of our respondents have received help from their bank to reduce or eliminate certain fees.
Only six of the 26 largest banks and credit unions have made waiving overdraft or NSF fees a relief option, and just five are waiving ATM fees. Of those that charge monthly fees, only two banks have committed to waiving those fees. On average, 32% of individuals with an annual household income below $75,000 trust their bank a lot to do right by their customers.
Meanwhile, that percentage jumps to 46% for those with an annual household income of $75,000 to $99,999 and to 55% for those who make over $100,000.
Lower earners are also less trusting of the government’s response and the CARES Act
On average, about 29% of those who make less than $75,000 have any trust in the government to do right by consumers, and about 31% are confident that the coronavirus rescue package is providing economic relief and stimulus. Meanwhile, 37% of folks who make more than $75,000 trust the government to do right by its constituents and are confident in the coronavirus relief bill.
Where Your Money Is Safe
On the whole, consumers are confident about keeping cash in the bank despite economic uncertainty. The survey found that 58% “strongly” agreed their cash is safe in the bank, and 34% “somewhat” agreed. Only 5% of consumers disagreed that their money is safe in the bank right now, while the remaining 3% were unsure.
Older Americans generally feel better about leaving their cash in the bank. Only an average of 3% of Gen X, baby boomers and the silent generation disagreed that their cash is safe in the bank right now, compared to about 12% of Gen Z and 6% of millennials. Those dealing with an online-only bank are more likely to feel their money is unsafe, although it’s still only 7% of those respondents compared to an average of 5% of those who feel that way at other banking institutions.
For the full survey findings and additional information, visit here
DepositAccounts commissioned Qualtrics to conduct an online survey of 2,008 Americans, with the sample base proportioned to represent the overall population. We defined the generations as follows:
Gen Z is defined as ages 18 to 22
Millennials as ages 23 to 38
Gen X as ages 39 to 53
Baby boomers as ages 54 to 73
Silent generation as ages 74 and over
The survey was fielded April 28-May 1, 2020.
DepositAccounts.com is the largest and most comprehensive online publication in the U.S. dedicated to banking and deposits product information for consumers. It covers every federally insured bank and credit union and utilizes its patented technology to track approximately 275,000 consumer deposit rates, each updated nightly. The site features more than 11,000 editorial articles detailing depository strategies and highlighting current bank rates and offers. It is also home to one of the largest communities of depositors on the Web, hosting more than 100,000 comments, customer reviews, and forum threads.