October 8: Industry Risk - Financial Institutions Not Communicating with Customers Enough in Present Economic Turmoil

Location: Princeton
Author: Lisa Olson
Date: Wednesday, October 8, 2008

Despite Wall Street Chaos, Most Investors Consider Assets Safe

According to a new survey from Opinion Research Corporation (an infoGROUP Company), banks, savings and loans, and credit unions appear to be doing a poor job of keeping their customers informed in this turbulent economic climate. Nearly half of those surveyed (46%) said the bank in which they have the most assets was not communicating with them enough.

Mutual funds fared slightly better than banks, with 42 percent of respondents that hold the majority of assets there expressing disappointment in the level of communication from their provider. Brokerage firms appeared to be doing the best job of keeping their customers informed, with sixty-two percent of respondents that hold the majority of assets there indicating that the level of communication has been good.

“With the stock market on a rollercoaster ride, financial institutions must take proactive measures to reassure their customers and shareholders and bolster confidence in their performance,” said Jeff Resnick, President of Opinion Research Corporation (US). “In the absence of information, people will fear the worst.”

Despite the chaos on Wall Street, overall confidence levels in financial services institutions remain high, with eighty-five percent of respondents saying they consider their assets to be safe. However, the study shows that levels of confidence vary by sector.

Banks, S&L’s, and credit unions were regarded as safe havens for savings by 89 percent of those who keep their assets there. Brokerage firms and mutual funds fared almost as well, with 78 percent of those who have the majority of their assets in either of these institutions saying they were confident that their assets were safe.

The survey also found that more than half (55%) of respondents thought that the crisis would have a negative impact on them, while 24 percent didn’t think it would have any impact on them.

Article Printed From RiskCenter.com