Banks have some of the worst reputations in the country, and customers often hate them. But one bank has customers that don't simply like it. They love it.

The importance of treating customers well
Warren Buffett once said:

If we are delighting customers, eliminating unnecessary costs and improving our products and services, we gain strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither. On daily basis, the effects of our actions are imperceptible; cumulatively, though, their consequences are enormous.

That wisdom is undeniably true for banks. After all, one of the biggest highlights of Bank of America (BAC -0.13%) this year has been the massive rebound in its customer satisfaction. It saw impressive gains in its popular customer satisfaction score by J.D. Power. A recent presentation by Bank of America revealed it has watched its customer satisfaction increase by more than 10%.

And that all excludes the recent remark from the CEO at Bank of America, Brian Moynihan, who recently told Forbes magazine:

We've fined-tuned the business around basic principles: Who are our customers? What do they need from us? And what can we be good at?

But the surprise isn't going to come from Bank of America, because while it has improved significantly from its dead last ranking in customer loyalty in 2012, according to the Satmetrix Net Promoter Industry Benchmarks, there were still five banks ranked ahead of it.

The banks ahead
One of the banks that surpassed Bank of America was regional bank SunTrust (STI). But SunTrust hasn't had the best run of things in recent years. The recent American Banker and Reputation Institute Survey of Bank Reputations revealed it actually saw the second largest drop across 25 different banks based on how its customers felt about it.  

Wall Street Bull. Source: Flickr / thenails.

Forrester Research showed the customer experience ranking from SunTrust also took a slight step backwards in 2014, but it still remained ahead of some of its better-known peers. And SunTrust remained ahead of the average in its core markets, according to J.D. Power.

But it turns out, there's one bank that crushes not only Bank of America and SunTrust, but all of the banks out there.

That bank? USAA. And it isn't even close.

The big bank that could
USAA provides all sorts of financial services to its customers, including not only banking, but also insurance, investment, and retirement products. But technically it doesn't have customers, it has members -- and over 10 million of them to be exact -- who are current or former members of the U.S. military and their families.

And it doesn't simply provide the services, it delivers them in a way its customers love. In the words of Satmetrix:

For the fifth year in a row, USAA led the loyalty rankings not only in the banking category (81 points), but also in the automotive insurance (81 points) and home/contents insurance (84 points) categories. SunTrust Bank's NPS came in at a distant second -- just 45 points. For the second year in a row, HSBC trailed the category with a score of -14 points.

And as the consultancy Bain notes, it isn't just in one area of the country where USAA excels, but in fact across the United States:


Source: Bain & Company Customer loyalty in retail banking.

But it doesn't just stop there, as in addition to its strong loyalty, USAA ranked highest compared to the other banks when it came to customer experience, and it was even given the Customer Experience Index Award of Excellence. 

So, how has it done so well? The opening remarks from its CEO in the latest report to its members provide a glimpse: 

With decisions that could affect the financial security of you and your family -- especially in a year of sequestration, payroll tax increases, health care reform and a government shutdown -- it all comes down to the people you trust. USAA is a community of people who share and live military-inspired values such as service, loyalty, honesty and integrity, so we begin with a common foundation.

Machinist's Mate Arturo Dedios, fills out a survey to receive saving information from USAA.

He followed up by adding simply, "Trust isn't given; it is earned."

Banks across the country must follow USAA, and see they need to seek to gain back the trust of not only their customers and clients, but the broader public as well. And those who do that will be met with great success.

But frankly, it's great to know the financial institution whose mission is "to facilitate the financial security of its members, associates, and their families," who serve our country through the military -- including my brother -- does such a commendable job.

At times, we can think banks and financial institutions are evil. But USAA shows there is perhaps no clearer picture of one that is good.