Wednesday, February 26th, 2014 - Roy Morgan Research

The satisfaction level of the personal customers of banks reached 81.6% in January, a marginal increase from 81.5% in December, but enough to achieve the highest level in the 18 years of this survey. The Big Four banks scored 80.2% satisfaction, and the other banks scored 84.6%. The major reason for the Big Four’s improvement over the last 12 months (+1.6% points) has been the interest rate reductions for their home loan customers, who have increased their satisfaction rating by 4.4% points compared to an increase of only 0.9% points for other customers. These are the latest findings from the Roy Morgan Research Consumer Single Source survey of over 50,000 people per annum.

In the six months to January 2014, the CBA maintained its top ranking of the Big Four with 82.1% satisfaction, followed by NAB (80.3%), Westpac (78.5%) and ANZ (77.9%). The smaller banks, however, remained the clear overall pace-setters with sixteen banks scoring higher than the big four, the leader being Teachers Mutual Bank on 91.4%.

The biggest improvers among the major banks over the last month were the CBA and the NAB (both up 0.3% points), followed by the ANZ (up 0.2% points). Westpac (down 0.3% points) showed a small decline.

Consumer Banking Satisfaction

consumer-banking-satisfaction

Source: Roy Morgan Research Consumer Banking Satisfaction Report, January 2014; Average 6 monthly sample for Big Four banks (n = 18,351).

Over the last 12 months the CBA showed the largest improvement in satisfaction (up 2.1% points) followed by ANZ (up 1.8% points), Westpac (up 1.2% points) and the NAB (up 0.8% points). All four banks showed improved satisfaction largely as a result of their home loan customers increasing their satisfaction on the back of the reductions in home loan rates. The ANZ home loan customers showed the biggest improvement (up 7.3% points) over the last 12 months, followed by Westpac (up 6.0% points), CBA (up 2.5% points) and NAB (up 1.9% points)..

The following chart shows the strong gains made in satisfaction over the last 12 months by the home loan customers of the four major banks relative to non-home loan customers. In the case of Westpac and the ANZ, their home loan customers now have higher satisfaction than their non-home loan customers. 

Satisfaction of Mortgage and Non-Mortgage Customers

mortgage-satisfaction

Source: Roy Morgan Research; August 2012 - January 2013; 6 month sample for Big Four banks n = 18,451.
Source:
 Roy Morgan Research, August 2013 - January 2014; 6 month sample for Big Four banks n = 17,625.

While the main driver of the improvement in customer satisfaction among the Big Four over the last 12 months has been the reduction in home loan interest rates, the increased use of internet banking is also contributing.

Internet banking is now used by far more customers than branches and with a higher level of satisfaction, it is obviously contributing to gains in overall customer satisfaction. The CBA has the highest level of satisfaction among their customers who use internet banking (92.2%) and branch banking (88.6%).

Satisfaction with Internet and Branch Banking

internet-branch-banking

Source: Roy Morgan Research; August 2013 - January 2014; 6 month sample for Big Four banks n = 17,625.

 

Norman Morris, Industry Communications Director, Roy Morgan Research, says:

The home loan interest rate reductions over the last two years have been driving big improvements in home loan customer satisfaction but with no change in rates since August 2013, the impact of this on customer satisfaction is likely to stabilise in the coming months. With this likely slowdown in the rate of satisfaction improvement from home loan customers, there will need to be more focus on improving satisfaction levels among non-home loan customers. This important group make up the majority of bank customers and will be looking for improvements in areas such as fees, service, products and higher interest rates. It will be important therefore when interest rates eventually rise that this group receive the full increase just as home loan customers expect to receive the full reductions when the cash rate declines.

 

“Apart from the impact that interest rates have on bank customer satisfaction, we have also seen that how people deal with their bank is also affecting satisfaction ratings. The increased use of internet banking for example has contributed to increased satisfaction overall because customer satisfaction with this channel now exceeds their satisfaction with branches for each of the big four banks. The challenge here will be to raise the satisfaction level of other channels such as branches and phone banking which remain the preferred method for many customers when dealing with their bank.

 

“With the Financial System Inquiry now underway there is sure to be more discussion on the extent of competition in the banking sector and how well the big four banks are serving their customers. We have seen from this survey that the clear majority of smaller banks are rated ahead of the major four banks when it comes to customer satisfaction and this presents a challenge for the big banks to close the gap in satisfaction to their smaller competitors.”

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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.
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Keywords

banking, finance, banking satisfaction, NAB, ANZ, CBA, Westpac, Teachers Mutual

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