Charity begins at home, or at least the general area of one’s home, and consumers show a penchant for supporting financial institutions (FIs) and banks that help those in need in the communities where they operate or have a physical presence.
“Financial Institutions And Customer Loyalty: The Value Of Investing In Your Community,” a PYMNTS and Elan collaboration, examined this topic in a survey of over 2,500 U.S. consumers and found this correlation: those who spend the most on their credit cards each month tend to be more involved with their local communities and exhibit a greater interest in their FIs’ involvement with and support of community organizations. For these consumers, the interest in an FI’s community involvement is great enough to influence where they keep their accounts.
It’s an important connection and one that some FIs may overlook or undervalue.
“High credit card spenders, a valuable cohort of consumers, are the most likely to switch to an FI that donates more to local charities,” the study states, noting that 37% of consumers classified as nonrevolving spenders and 42% of revolving spenders say they are likely to switch FIs based on their charitable support.
By comparison, only 20% of nonrevolving low spenders and 25% of revolving low spenders said they would move their accounts to FIs that support local charities more than their current FIs, as did 30% of consumers who do not use or do not have credit cards.
The study states that overall, “93% of consumers who say their FIs were generous with their charitable contributions are very or extremely satisfied with their primary FIs, and 86% of consumers who say their FIs made more modest charitable donations are equally satisfied. By comparison, 74% of consumers who say their primary FIs did not contribute to charity are very or extremely satisfied customers.”
In other words, the more generous the FI, the more satisfied account holders are. It makes sense, as we found that nearly three-quarters of consumers give to charity, and they want their FIs to support local causes as well. Consumers’ desire to see FIs connect with local charities is strong enough that some will go as far as to move their accounts to a more charitable FI.