The majority of Australians (97%) aged 14+ have a transaction or deposit account with a financial institution. Approximately 650,000 (3.5%) of these customers are intending to switch an account in the next 6 months. In dollar terms these accounts are worth approximately $16.4 billion. These figures are based on the latest findings from the Roy Morgan Consumer Finance Single Source Survey.
In the 6 months to June 2013, the majority of transaction or deposit account customers intend to stay with their current financial institution, however approximately 3.5% are planning to switch a transaction or deposit account to another institution in the next 6 months.
The total transaction or deposit account market is worth approximately $514.4 billion dollars. Customers who plan to switch their transaction accounts are worth slightly over $16.4 billion dollars.
In terms of dollar share for customers who plan to move, Commonwealth Bank and ANZ make up close to 50% of the total market (CBA with 25.6% and ANZ at 23.5%), followed by National Australia Bank at 10.6% and Westpac at 9.7%. Credit Union or Building Societies account for 5.1% of the switching market share and the remaining 25.5% at other institutions.
The ANZ’s potential loss of $3.9b over the next 6 months represents 5.5% of their customer balances in these accounts; this is well ahead of the CBA that could loose 3.5% of balances, followed by NAB (3.1%) and Westpac (2.7%).
It is interesting to note that approximately 1 in 4 (26%) of all switching customers are yet to make up their mind in terms of the institution they intend to switch to. There is an opportunity for financial institutions to understand these consumers and position their products and services accordingly to gain market share.
Among customers who are intending to switch their transaction accounts, the next few months are crucial in their decision making. If institutions are not successful in meeting their banking needs and demand, customers might actually take the plunge.
Norman Morris, Industry Communications Director, Roy Morgan Research says:
“Perhaps in the past the banking industry has been guilty of chasing new customers rather than ensuring that their existing customers are retained and grown. Special deals or introduction rates are often used to attract new business but it may be at the expense of existing customers who are likely to feel less valued.
“We have seen in this example that $16.4 billion dollars are likely to be switched in deposit and transaction accounts over the next six months, if we included cards, loans, etc the figure would be much greater.
“It will be interesting to note what actions the financial institutions take in order to attract new customers and at the same time retain the existing ones.”
Roy Morgan Research
Roy Morgan Research is Australia’s best known and longest established market research and public opinion survey company. Roy Morgan Single Source is thorough, accurate, and provides comprehensive, directly applicable information about current and future customers. It is unique in that it directs all the questions to each individual from a base survey sample of around 55,000 interviews in Australia and 15,000 interviews in New Zealand annually - the largest Single Source databases in the world. The questions asked relate to lifestyle and attitudes, media consumption habits (including TV, radio, newspapers, magazines, cinema, catalogues, pay TV and the Internet), brand and product usage, purchase intentions, retail visitations, service provider preferences, financial information and recreation and leisure activities. This lead product is supported by a nationally networked, consultancy-orientated market research capability.
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