Most people are happy with their banks, but they're even happierwith their credit unions, according to the 2018 FIS Performance Against Customer Expectations(PACE) study released this week.

The study, which asked 1,788 U.S. consumers to rank theimportance of nine performance attributes, found that 82% of bankcustomers were “extremely satisfied” or “very satisfied” with theirbanking relationships. That number rose to 92% for credit unionmembers.

“Credit union members once again are much more satisfied, andcustomers from top 50 global banks are much less satisfied withtheir banks,” the study said. “Unsurprisingly, customers from largebanks — top 50 or regional banks — are most unsatisfied with thefees they incur.”

“While it has yet to hit a tipping point where big bankcustomers jump ship in favor of the personal service offered bysmaller local banks, some of this year's PACE findings suggest itmay not be too far off. The big lead amassed by the top 50 globalbanks in digital banking is quickly evaporating, and consumers cannow be served practically anywhere by any bank with the right digital offerings.”

Digital is the new branch

One driver of that satisfaction may be digital capabilities. The FIS study found that 72% of all bankcontacts are now digital, and respondents 52 and younger now usemobile phones and tablets more than they use PCs, ATMs and branchesto interact with their credit unions and other financialinstitutions.

Baby boomers were more likely to use their desktops or laptopsfor those interactions (54% of their digital interactions were viadesktop or laptop); millennials were more likely to use theirphones (63% for those age 18-26 and 57% for those 27-37). Abouthalf (49%) of GenXers' digital banking interactions came viasmartphone.

“In general, 42% of consumers report that they use their bank'smobile app more now than they did a year ago. This highlights aneeded shift in strategic thinking for banking providers,especially smaller ones, as their mobile interfaces — not their physical locations or eventheir personnel — are now the 'face' of the bank,” FIS said.

No excuses for lack of features

Credit unions and community banks have good reason to keepthemselves at the forefront of the digital banking world, the studynoted. Consumers now expect them to have the same digitalcapabilities that large banks have, including things such as mobiledeposits, transfers, account opening, digital payments and mobilewallets.

“Given how affordably and quickly such features can be rolledout, these are reasonable expectations,” FIS added.

Digital payment services are one way credit unions and otherfinancial institutions might stay front-of-mind with members. FISfound that 36% of credit unions currently offer digital payments,compared to 39% of direct banks, 36% of the top 50 global banks,32% of community banks and 30% of regional banks. Thirteen percentof credit unions offered mobile wallets, 10% offered a P2P app, 14%offered virtual cards, 9% offered Venmo, 6% offered PayPal and 3%offered Apple Pay Cash.

Protect data, keep members

Offering digital capabilities also affects member loyalty,according to the study.

Virtually all respondents (96%) said they believe their primarybanking providers ensure their transactions are safe, and 94% saidthey believe their primary banking providers protect their personalinformation. It better stay that way, or else, the study resultssuggested.

“This faith and trust can quickly turn against bankingproviders. If a security lapse happens, customers are far morelikely to switch banks. In fact, one in four U.S. consumers whoexperience fraud eventually go on to switch banking providers,” thestudy said.