The banking industry indeed faces a major crisis of confidence, but individual banking institutions see no significant loss of confidence from their own customers.
In an anonymous survey that attracted nearly 100 responses, 96 percent of respondents say consumer confidence across the industry has decreased significantly in the past year, as the market has plummeted, institutions have failed and credit has been crunched.
Yet, asked how the consumer confidence in their own institutions has changed:
- Only 16% report a decrease in confidence;
- 85% say confidence has stayed the same or even strengthened, owing to the institution's own efforts.
The numbers are even rosier for credit unions, 95% of whom report either a confidence increase or no significant change.
Even so, institutions are responding aggressively to the industry's crisis, mainly by meeting face-to-face with customers (75%), issuing public statements (55%) or taking out media advertisements (50%) to reinforce the safety and soundness of the institutions.
"These results confirm what we already had observed in the marketplace," says Tom Field, Editorial Director of ISMG. "There's a huge distinction between Wall Street and Main Street institutions and the realities they face right now. But it's up to the community banking institutions to reach out and reassure their customers about the safety and soundness of their deposits."
In other survey results:
Institutions are feeling the effects of the economic downturn. More than half (55%) have seen an influx of deposits recently, and respondents are evenly split (24% each) between seeing a decrease in deposits and an increase in new accounts.
In this down economy, institutions feel most susceptible to:
- Attacks against customers and employees (phishing, other social engineering schemes) - 64%
- Increased competition - 62%
- Significant outflow of deposits - 60%.
And yet, in the face of these concerns, institutions still have aggressive business priorities, including:
- Increase the institution's deposit base - 74%
- Enhance customer confidence - 73%
- Enhance overall risk management practices - 58%
- Offer new or enhance existing banking services - 41%
About ISMG: With members representing over 13,000 financial institutions, and regular input from federal banking agency officers and their own board of advisors, ISMG delivers webinars and online training that is focused, timely and -- most important -- useful. Presented by actual practitioners and industry experts, each presentation (ranging from 90 minutes to two-plus hours) delivers how-to and practical information on the inner-workings of information security programs at financial institutions.