The financial institutions have recently been in the news for various reasons. The economy seems to be recovering very well in the United States and has been showing positive effects globally. However, the financial institutions claim that their businesses are becoming reductively unfeasible and unviable as the current economy situation with its monetary policy that is in place. Also, the credit unions and the commercial and conventional financial institutions have been in the news due to the strong turf war that has been occurring. Many credit unions have been accused of trying to make their way into commercial banks.
The basis of low public opinion
The public rivalry between the two kinds of financial institutions has led for both of them to drop in opinion polls in the American people’s eyes. The credit unions are a financial institution body that allow and offer beneficial credit lending options to various lower and medium income groups, however, the tax exemption due to the restriction it may receive on operations is large due to their restriction in expansion into various other commercial financial credit lending systems. Recently, the unions seem to have been making a play into the sector, while the banks have cried foul. The rivalry which has ensued has been making consumers lose confidence in the overall financial system.
Reports and surveys state that the belief that people have in the financial system has fallen to a five year low. The American Consumer Satisfaction Index has been rated at 81 out of 100. This is an index that is used to rate many organizations and the credit unions seem to be sharing the spotlight with the various B-schools across the Unites States, which also suffered a bad rating in the index. The reason for a bad B-school rating is the exorbitant financial investment with no returns.
The survey was carried out in the third quarter of this year, with over 9000 people that were included in the survey. The survey index also displayed that people have an even lower opinion and satisfaction index in terms of the commercial financial institutions such as the commercial banking system. The regional and national level banks scored in the mid 70s, varying from 70 to 76 respectively.
The overall drop in the profitability and functionality has also proved to be a problem in maintaining a good image in the eyes of the consumer. The overall sector performance had dropped this year by 0.4 points to 74.8.