Thursday, September 17th, 2015 - Roy Morgan Research

The big four banks in Australia increased their personal customers (aged over 14) by 1,042,000 from July 2011 to July 2015. This is an increase of 5.5% and is above the population growth over the same period (5.2%), indicating that they are retaining their dominant market position despite strong competition.

These are the latest figures from Roy Morgan Single with over 50,000 interviews per year.

NAB leads customer growth

Among the big four, the NAB growth in personal customers growth over the last four years was 15.7%, followed by the CBA (including BankWest) with 5.2%, ANZ (2.7%) and Westpac (including the St George Group) on 2.5%.

Change in personal banking customer numbers 2011 to 2015 - by banking and finance quintiles*:

Need to consider potential customer value

In addition to looking at the growth in customer numbers, it is important to understand the potential value of the segments in which the growth is occurring. In order to do this we have analysed gains in terms of segments based on the total financial footings (or value) that customers hold across all financial products and institutions. These products include all loans, amounts outstanding on cards, accounts, wealth management and superannuation. The segments have been produced by dividing the population into quintiles to represent five equal groups.

Clearly the most important segment in terms of dollars is the top quintile (quintile 5) which accounts for only 20% of the population but it represents nearly two- thirds (63%) of the total market value (footings) of financial services.

The biggest increase in customer numbers in the top quintile since 2011 was by the NAB with 9.2%, closely followed by the ANZ (up 8.8%).

The other major segment (quintile 4) accounts for just on a quarter (24.7%) of the total market value of the financial services market. All four banks showed gains in this segment, with the highest being the NAB (up 15.4%), followed by the CBA (up 8.8%).

In contrast to these high value customers, the lowest value quintile account for less than 1% of total market value (0.3%) and as such represents very little current potential although some may increase in the future. In this segment the NAB showed the greatest growth (up 32.5%), followed by the CBA (up 5.8%) and Westpac (up 5.4%).

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

“The big four banks have been successful at increasing customer numbers but the issue now is how to grow the customer base in the areas with the greatest profit potential.

“The strong NAB result in terms of customer growth is likely to be as a result of the “ break-up” campaign that started in 2011 with a combination of cutting fees,aggressive home lending and focus on improving customer satisfaction which had been lagging well behind their peers. Since that date, customer satisfaction increased to rival the big four leader, the CBA. We have seen that this campaign appears to have increased customer numbers across all segments but with the greatest growth being in the lowest value segment ( probably as a result of reduced fees ), this represents a potential issue for customer profitability.

“The challenge for all banks now is how to increase cross sell to their existing high potential value customers ie the top 40% that account for nearly 90% of market value. These higher value groups generally deal with a larger number of financial institutions and so have a much lower “share of wallet” than the lower value customers. As such they represent the greatest potential but they need an incentive to consolidate their finances and so banks need to improve on their more typical “product silo” approach to selling if they are to succeed.”

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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.
Shaun Ellis
P: 03 9224 5332


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