WESTLAKE VILLAGE, Calif., Nov. 10 /PRNewswire/ -- Based on analysis of 70
million blog and discussion board posts examined during the past two months,
the volume of online discussion regarding financial institutions has increased
by four times since May 2008 with the tone of discussions being increasingly
negative, according to the J.D. Power and Associates Consumer Attitude Monitor
Report.
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The inaugural report analyzes posts from blogs and discussion boards
related to 22 different financial institutions that took place between
September and October 2008 and compares them to conversation volumes and
sentiment of financial-related discussions from May 2008. The report is
designed to provide executives in the financial services industry with ongoing
measures of consumer attitudes regarding changes that have taken place with
financial institutions and how those changes are influencing the saving and
borrowing habits of their customers and other consumers within their targeted
demographics.
The study finds that nearly one-fourth of online conversations about the
financial services industry center around the current financial crisis, with
topics such as the government bailout plan and bank failures featuring
prominently in online discussions. In September 2008, daily posts regarding
the government bailout plan reached a peak after the initial plan was rejected
by the House of Representatives.
Increases in negative online commentary reflect consumer resentment toward
financial institutions due to their perceived role in creating the current
volatile and uncertain economic environment. In particular, consumers are
expressing concerns about the following:
-- Their personal situations, arising from dramatic declines in
investment values
-- Loss of choice and control to "mega banks" created by recent high
profile mergers
-- Continued tight credit conditions and slow loan approvals
-- Lack of trust of financial institutions, with accusations that banks
are hoarding bailout funds to prop up stock prices
-- Provisions of "golden parachutes" for executives of failed
institutions
"Many consumers are angry and afraid, and they hold big banks and other
financial institutions responsible for the dire straits they believe the
economy is in," said Rockwell Clancy, executive director of financial services
at J.D. Power and Associates. "That said, online discussions suggest these
consumers are still gathering and sharing information and taking a
'wait-and-see' attitude before taking action. The key for financial companies
is to reach out to these customers before they reach the
'I'm-mad-and-I'm-not-going-to-take-it-anymore' stage."
Financial Institution Brand Comparison
The report details discussions about the financial crisis in general and
also classifies brands based on both volume (measured by the number of new
mentions per week, on average) and percentage of positive mentions. Brands
that are discussed are then categorized into one of four quadrants:
pacesetters, contenders, challenged and pressured.
Pacesetters
Brands classified as pacesetters have both higher-than-average volumes of
mentions and high positive sentiment and include financial institutions such
as Wachovia, JP Morgan Chase, Morgan Stanley and Wells Fargo.
"Pacesetters differentiate themselves from other brands by effectively
communicating their relative strengths to their customers and other consumers
in their targeted demographic," said Clancy. "However, these financial
institutions cannot afford to take their good images for granted and should
continue to take a proactive stance in promoting their positive messages."
Contenders
Brands that receive lower-than-average volume and higher positive
sentiment are classified as contenders and include E-Trade and Share
Building/ING, among others.
"Contenders are poised to emerge as pacesetters, provided that they are
diligent about keeping abreast of consumer needs and remain flexible enough to
respond quickly as those needs are expressed," said Clancy. "These brands may
also benefit from reaching out to customers of recently acquired banks, who
may feel displaced and disenfranchised."
Challenged
Those brands that receive higher-than-average volume but lower positive
sentiment are considered challenged and include WaMu, Bank of America and
Merrill Lynch.
"As their classification suggests, challenged brands are in peril of
losing existing customers and failing to gain new ones," said Clancy. "These
challenged brands, including two that have recently been acquired, need to
develop strategies to mitigate their low proportions of positive sentiment and
over-communicate positive messages about their unique programs and services."
Pressured
Brands that are classified as pressured receive lower-than-average volume
and low positive sentiment and include Capital One, Citi and HSBC, among
others.
"The fact that consumers are taking a 'wait-and-see' approach to the
financial market works in favor of brands that are pressured," said Clancy.
"However, delaying outreach to customers and not acting in a decisive manner
to establish clear brand messaging can result in a shift from being pressured
to being challenged."
Other Report Findings
The report also finds that, in light of recent acquisitions that have
taken place between some major financial institutions, consumers are gauging
how well banks are succeeding at assimilating newly acquired customers,
managing conversions and implementing new policies. In addition, consumers are
increasingly citing local and regional banks as preferred alternatives to
certain major banks that some consumers perceive as having contributed to the
collapse of other institutions in the financial service industry.
The J.D. Power and Associates Web Intelligence Division is unique in its
ability to assess both what is being said and who is doing the speaking in the
online world. Its patent-pending technology enables the classification of
posts and ability to estimate gender and age of the speaker, as well as rapid
identification and elimination of spam posts. The Web Intelligence Division
analyzes voices of the online community by using proprietary Natural Language
Processing and machine learning algorithms to dissect the who, what and why of
online opinion, offering in-depth insights for some of the world's leading
brands.
About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a
global marketing information services company operating in key business
sectors including Web intelligence, market research, forecasting, performance
improvement, training and customer satisfaction. The company's quality and
satisfaction measurements are based on responses from millions of consumers
annually. J.D. Power and Associates is a business unit of The McGraw-Hill
Companies.
About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global
information services provider meeting worldwide needs in the financial
services, education and business information markets through leading brands
such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power
and Associates. The Corporation has more than 280 offices in 40 countries.
Sales in 2007 were $6.8 billion. Additional information is available at
http://www.mcgraw-hill.com.
J.D. Power and Associates Media Relations Contacts:
John Tews Aimee Canlas
Troy, Mich. Westlake Village, Calif.
(248) 312-4119 (805) 418-8917
john.tews@jdpa.com aimee.canlas@jdpa.com
No advertising or other promotional use can be made of the information in
this release without the express prior written consent of J.D. Power and
Associates. http://www.jdpower.com/corporate
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appropriate link.
Rocky Clancy
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