Wednesday, September 25th, 2013 - Roy Morgan Research
Consumer satisfaction with the Big Four banks rose to 79.7% in August 2013 (up from 79.5% in July) and is now at an 18 year high but the higher value customers (those with incomes over $70k p.a.) of each of these banks have lower than average satisfaction. This presents a problem to the banks considering that this segment, which makes up only 19.8% of the population, accounts for 44% of the value of the total market for financial services (total footings). It is therefore critical to improve the satisfaction and retention of this highly profitable segment. These are the latest findings from the Roy Morgan Research Consumers Single Source survey of over 50,000 people per annum.

In the 6 months to August 2013, the highest satisfaction level for each of the Big Four banks was among those customers earning less than $35k p.a. This group makes up more than half (54%) of the population but accounts for only 27.8% of the total value of the market for financial services. The best performer among the Big Four in this lower income group is the CBA with 83.6% satisfaction. The CBA also leads the Big Four in the $35k to $70k segment but falls back in the higher income groups.

Westpac leads the satisfaction in the $70k to $100k segment also in the $130k+group. The ANZ is the leader in the $100k to $130k segment.

Bank Customer Satisfaction by Personal Income

bank-customer-satisfaction

Source:  Roy Morgan Research Consumer Single Source, March – August 2013, n= 17,860

In August, the CBA maintained its overall lead in customer satisfaction with 81.1% (up 0.2% points), still clearly ahead of second placed NAB on 79.1% (up 0.2% points), Westpac 78.7% (up 0.4% points) and ANZ 78.0% (down 0.2% points).

Over the past 12 months the biggest improver was the ANZ (up 4.1% points), followed by Westpac (up 4.0% points) and CBA (up 3.3% points). The NAB has lost some ground over the past year, down 0.7% points.

The major reason for the big improvement for three of the Big Four was the increase in satisfaction among their home loan customers as a result of the rate reduction over the year. The reason the NAB didn’t improve over the last 12 months was due to the fact that they didn’t capitalise on the reduction in the home loan rate as well as their competitors.

The home loan customers of each of the major bank, despite the interest rate declines, remain less satisfied than the non-home loan customers.

Consumer Banking Satisfaction

consumer-banking-satisfaction

Source:  Roy Morgan Research Consumer Single Source, August 2013, Average 6 monthly sample for Big Four banks n= 18,416

Business Banking Satisfaction

Satisfaction with the business customers of the Big Four banks showed some improvement in August, increasing by 0.5% points from July to 64.8%. Over the last 12 months the satisfaction of business customers has only improved by 1.4% points, putting them further behind personal customers’ satisfaction which increased by 3.0% points. This leaves the business banking customers’ satisfaction of the Big Four 14.9% points behind their personal customers.

Westpac remains the clear leader among the majors with 67.9% satisfaction, followed by the CBA (65.0%), NAB (63.6%) and ANZ (62.6%). Westpac is also the leader among micro and medium/large businesses while ANZ is the top among small businesses.

Business Banking Satisfaction

Business-banking-satisfaction

Source:  Roy Morgan Research Business Single Source, August 2013, Average 6 monthly sample size n= 6,781

Norman Morris, Industry Communications Director, says:

“Although the satisfaction with banks among their personal customers remains at historically high levels, it appears however that the more valuable higher income individuals and business customers have much lower satisfaction levels than the majority of customers and yet they are the ones with the greatest profit potential.


“The banks will need to increase their focus on these groups as they are more likely to face increased competition from specialist banks and other financial institutions that will ‘cherry pick’ these high value customers.


“Our research shows that around 400,000 people and over 200,000 businesses intend to switch their main financial institution (MFI) over the next twelve months. This indicates a readiness to moving banks if the need arises. In this situation, the key focus of the banks will be the need to retain and attract the customers with the greatest potential rather than letting them just drift off.”

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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.
Shaun Ellis
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Keywords

banking, banking satisfaction, big four, anz, cba, nab, westpac

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