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Credit Union Checking Accounts Have Highest Value (But it Doesn’t Matter)

Things don't always go as planned when doing consumer research. In a study I conducted recently, I asked consumers how they perceived the value of their checking accounts relative to other services they receive. I thought they'd say that checking accounts were a terrible value. I was wrong.

That wasn't the only surprise.

Checking Account Value Perceptions

Overall, 42% of consumers think their checking account is a great value, and 38% consider it a "good" value. Not surprisingly, perceptions vary by whether or not someone has a free checking account--45% of free account holders said their accounts were a great value versus a third of fee-based account holders.

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Consumers whose primary checking account is with a credit union were far more likely to think their account was a great value than consumers who bank with a megabank (or other type of financial institution, for that matter).

The differences in perceptions by type of account at the primary FI level is interesting. Among consumers who bank with a credit union, community bank, or large regional bank, there was a big gap in value perception between free account holders and those with a fee-based account. Among megabank customers, however, there was hardly any gap.

There were significant differences by generation, as well. Despite the fact that 56% of Millennials have their primary checking account with a megabank, those who bank with a credit union were far more likely to say their account was a great value than Millennials banking with a megabank.

The results provide credit unions with some great bragging rights. What good it will do, I'm not so sure. With more than half of Millennials choosing megabanks, what's the message here? That Millennials don't care about value? Do Millennials who choose megabanks not care that their friends who choose a credit union are twice as likely to think the credit union's checking account is a great value?

The other worrisome aspect to this is that value perceptions are a poor predictor of cross-sell and referral behavior. Even though relatively fewer consumers thought a megabank's checking account was a "great" value, megabank customers were more likely add non-deposit over the past year than customers/members of other types of institution. In other words, the megabanks' marketing prowess overcome the perceived value inferiority of their accounts.

In addition, across each type of institution, there was little difference in cross-sell and referral behavior between consumers who thought their account was a "great" value and those who thought it was a "good" value.

I really thought, going into this, that value perceptions would have told a very different story about consumer behavior. Guess I was wrong. I hate being wrong.

Ron Shevlin
Director of Research
Cornerstone Advisors

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