When it comes to community support, credit card users strongly prefer financial institutions (FIs) and banks that actively contribute to local charities within the areas where they operate or have a physical presence.
A collaborative study titled “Financial Institutions And Customer Loyalty: The Value Of Investing In Your Community,” conducted by PYMNTS and Elan, shed light on this topic through a survey involving over 2,500 consumers in the United States.
The findings revealed a significant correlation: individuals who spend the most on their credit cards each month tend to be more engaged with their local communities and display a greater interest in their FIs’ involvement with and support of community organizations. For these consumers, an FI’s commitment to the community influences their choice of banking provider.
This connection holds immense importance, one that some FIs may overlook or underestimate.
The study emphasized that high credit card spenders, a valuable consumer group, will likely switch to an FI, demonstrating stronger support for local charities. Among consumers classified as non-revolving spenders, 37% expressed a likelihood to switch FIs based on their charitable contributions, while the figure rose to 42% among revolving spenders.
In comparison, only 20% of non-revolving low spenders and 25% of revolving low spenders indicated a willingness to move their accounts to FIs that prioritize local charities more than their current banks. Similarly, 30% of consumers who either do not use credit cards or do not possess them shared the same sentiment.
The study further revealed that “93% of consumers who acknowledged their FIs’ generous charitable contributions reported being very or extremely satisfied with their primary FIs.” Similarly, 86% of consumers who noted their FIs’ more modest charitable donations expressed equal satisfaction. In contrast, only 74% of consumers who stated that their primary FIs made no charitable contributions reported being very satisfied customers.
In simpler terms, the more generous an FI is in supporting local charities, the higher the satisfaction among its account holders. This finding aligns with the fact that nearly three-quarters of consumers contribute to charitable causes and desire their FIs to align with their values. Such is the strength of consumers’ desire to witness FIs engaging with local charities, and some are even willing to switch their accounts to more philanthropic banks.
In conclusion, the study highlights the significant role FIs’ support for local charities plays in enhancing credit card users’ satisfaction with their banks. By fostering stronger connections with the communities they serve and demonstrating their commitment to social causes, FIs can build customer loyalty and differentiate themselves in a highly competitive market.
