Ranking the 10 Biggest Banks

Quickly:

  • Bank Director’s year-long Ranking Banking study focuses less on current profitability and market capitalization & more on how the top 10 banks in the U.S. are strategically positioned for success.

By Al Dominick, CEO of DirectorCorps — parent co. to Bank Director & FinXTech

WASHINGTON, DC — It is with tremendous pride that I share the results of Bank Director’s year-long study on America’s 10 largest banks.
  As my colleague, Bill King, wrote to open our inaugural Ranking Banking, we felt that a truly comprehensive analysis of the largest banks was missing, one that includes not just profitability or customer satisfaction ratings, but also compiles numerous measures of strength and financial health — a project to rank each of the largest banks for each major line of business based on qualities that all big banks need.

For instance, we decided to rank banks for branch networks, mobile banking, innovation and wealth management. We analyzed corporate banking and small business lending. We interviewed experts in the field and did secret shopper visits to the biggest banks to find out what the customer experience was like.  Unlike other rankings, we even included complaints lodged with the Consumer Financial Protection Bureau as one of many customer satisfaction metrics that we analyzed.  In other words, there is little about the biggest banks in the nation that we left out.

So who came out on top?

JPMorgan Chase & Co. topped Bank Director’s 2018 Ranking Banking study.

In fact, Chase won five of the ten individual categories and ranked near the top in three more, and was judged by Bank Director to be the most worthy claimant of the title Best of the Biggest Banks.  The individual category winners are:

Best Branch Network: Wells Fargo & Co.

Despite its well-publicized unauthorized account opening scandal, Wells Fargo topped the branch category by showing the best balance of deposit growth and efficiency, and scored well on customer experience reports from Bank Director’s on-site visits.

Best Board: Citigroup

In ranking the boards of directors of the big banks, Bank Director analyzed board composition by factors such as critical skill sets, diversity, median compensation relative to profitability and independence. Citigroup’s board best balanced all components.

Best Brand: JPMorgan Chase & Co.

Chase and runner-up Capital One Financial Corp. stood out for their media spend as a percentage of revenue, and both exhibited strong customer perception metrics.

Best Mobile Strategy: JPMorgan Chase & Co.

Chase has been successful in driving new and existing customers to its mobile products, leading to an impressive digital footprint, measured through mobile app downloads. The bank’s app also scored well with consumers.

Best Core Deposit Growth Strategy: BB&T Corp.

BB&T had a low cost of funds compared to the other ranked banks, and its acquisitions played a strong role in its core deposit growth, which far surpassed the other banks in the ranking.

Most Innovative: JPMorgan Chase & Co.

Chase most successfully balanced actual results with sizeable investments in technological innovation. These initiatives include an in-residence program and a financial commitment to the CFSI Financial Solutions Lab. Chase has also been an active investor in fintech companies.

Best Credit Card Program: JPMorgan Chase & Co.

Chase barely edged out fast-growing Capital One to take the credit card category, outpacing most of its competitors in terms of credit card loan volume and the breadth of its product offering. Chase also scored well with outside brand and market perception studies.

Best Small Business Program: Wells Fargo & Co.

Wells Fargo has long been recognized as a national leader in banking to small businesses, largely because of its extensive branch structure, and showed strong loan growth, which is difficult to manage from a large base. Wells Fargo is also the nation’s most active SBA lender and had the highest volume of small business loans.

Best Bank for Big Business: JPMorgan Chase & Co.

Big banks serve big businesses well, and finding qualitative differences among the biggest players in this category—Chase, Bank of America and Citigroup—is difficult. But Chase takes the category due to its high level of deposit share, loan volume and market penetration.

Best Wealth Management Program: Bank of America Corp.

With Merrill Lynch fueling its wealth management division, Bank of America topped the category by scoring highly in a variety of metrics, including number of advisors (more than 18,000 at last count) and net revenue for wealth and asset management, as well as earning high marks for market perception and from Bank Director’s panel of experts.

FWIW…

The 10 largest U.S. retail banks play an enormously important role in the nation’s economy and the lives of everyday Americans. For example, at the end of 2016, the top 10 banks accounted for over 53 percent of total industry assets, and 57 percent of total domestic deposits, according to the Federal Deposit Insurance Corp. The top four credit card issuers in 2016—JPMorgan Chase & Co., Bank of America Corp., Citigroup and Capital One Financial Corp.—put more than 303 million pieces of plastic in the hands of eager U.S. consumers, according to The Nilson Report.

To Zig or Zag

While President Obama’s nomination of Federal Reserve Vice Chair Janet Yellen to lead the central bank garnered significant attention this week, the twittersphere was ablaze with news on emerging payments and financial services.  Personally, I focused a lot of my time on retail banking, advertising and marketing stories — a pleasant diversion from the political showdown here in Washington.  Accordingly, this week’s column highlights the creative side of building relationships and engaging with potential customers.  Please let me know what you think via Twitter (@aldominick) or by commenting below.

(1) How Do You Introduce a Mobile-Only Bank? With a Mobile Orchestra, Of Course.  Now, I realize most banks in the U.S. have nowhere near the budget needed for an advertisement like this. Still, BNP Paribas‘ “Hello Bank!” — which claims to be Europe’s first fully digital mobile bank — pulls off “a smart orchestra stunt.” According to AdAge, “the campaign brought together the talents from the musical and tech world for a one-of-a-kind performance by the orchestra that showed what you could do with just your mobile phone.”  Taped during a performance in Prague, the Czech National Symphony Orchestra’s 60 musicians put aside their instruments for a special performance of “Carmen.”  Take a look:

(2) From your ears to your eyes, a test of your social media savvy: #PACYOURBAGS. Do you get the hashtag?  Here’s a hint: this is a promotion run by Bank of the West (a wholly owned subsidiary of BNP Paribas).  Still confused?  While many still wrestle with a social media strategy, the San Francisco-based bank has taken to Instagram and Facebook to offer exclusive Pac-12 content — including news, events and videos — to better engage with current and potential customers under this hashtag.

Bank of the West hashtag

Visit their Facebook page and you’ll be invited to “capture any great moments from this week’s college football games… Tag them with #PACYOURBAGS on Instagram to enter and you could win $250 and a trip for two to the Rose Bowl Stadium on 1/1/14!”  Dare I say, #Cool.

(3) From Prague to the Pac-12, we’ve covered a lot in a short amount of time.  To wrap things up, let me share a story closer to home.  This one involves a few plucky upstarts taking on the biggest of the big.  No, this isn’t a tale of a community bank competing head on with Bank of America; rather, a link to an article that shows multiple startups trying to disrupt various sectors within the consumer goods industry.  Much like their BofA and Wells Fargo brethren, P&G and Unilever “have scale but are under constant assault from savvy upstarts.”  Yes, I’m drawing a parallel between the razor blades you might find in your bathroom to the battle for bank customers vis-a-vis “How Tiny Startups Like Hello and 800Razors Are Stealing Share From CPG Giants.” The premise: “smaller brands’ ability to break through goes to digital disruption in media and retailing.”  An interesting parallel, especially for those bankers willing “to zig away from the strategic and creative zags of category titans.”

Aloha Friday!

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