The satisfaction level of the big four banks’ personal customers in the six months to April 2016 was 80.2%, up from 80.0% in March, and represents a positive development after three months of declines. The improvement was seen across both home-loan customers (up 0.3% points) and non-home loan customers (up 0.1% point). These are the latest findings from Roy Morgan’s Single Source survey of 50,000+ people pa.
Customer satisfaction with the big four banks is close to historically high levels but has remained around the 80% mark for the last two years. The satisfaction of home-loan customers (77.7%) remains below that of other customers (80.8%) and has not yet recovered to where it was in September (80.1%) prior to the home-loan rate increases announced in October. This below-average satisfaction performance for home-loan customers is proving to be a drag on overall customer satisfaction, although the April results combined with the recent drop in home-loan rates should provide a boost to satisfaction.
ANZ the big improver in April
In April, the ANZ showed the biggest improvement among the big four, rising 1.1% points to 79.1% and overtaking the NAB, which declined by 1.0% points to 78.9%.
Consumer Banking Satisfaction
Source: Roy Morgan Research Consumer Banking Satisfaction Report April 2016, average six-month sample n=25,600
The ANZ improvement was greatest for their non-home loan customers (up 1.3% points) but satisfaction among home-loan customers also improved (up 0.6% points). The NAB’s decline occurred across both home-loan customers (down 0.8% points) and non-home loan customers (down 1.1% points).
The CBA retains a clear lead among the big four with 81.7% satisfaction (up 0.4% points from March), ahead of Westpac (79.4%), ANZ (79.1%) and NAB (78.9%).
Looking at the banks outside of the big four, Teachers Mutual remains the best performer with a 92.7% satisfaction rating, followed by Heritage Bank (92.1%), Bank Australia (91.4%) and Beyond Bank Australia (91.0%). Overall, the Mutual Banks, with 90.6% satisfaction, remain the pacesetters with the big four lagging behind at 80.2%.
Home-loan customers more satisfied with the smaller banks
The home-loan customers of the banks outside of the big four have much higher satisfaction levels than their big competitors and so present a major threat in this highly competitive market. The top three performers are ING Direct (94.3% satisfaction), Bendigo Bank (93.3%) and ME Bank (91.2%). The best of the big four is Westpac (79.4%), followed by CBA (78.6%).
Satisfaction of Home-Loan Customers
Source: Roy Morgan Research Single Source: November 2015 - April 2016 (n = 6,798).
It is worth noting that the top three banks for home-loan customer satisfaction have higher satisfaction for these customers compared to their non-home loan customers. This is the opposite with the big four, whose non-home loan customers generally have the highest satisfaction.
Why are some bank customers dissatisfied?
Although bank customer satisfaction is currently around historically high levels, there remains a small group (currently 5.2%) who are either “fairly dissatisfied” or “very dissatisfied” with their bank.
In order to understand the causes of this dissatisfaction, Roy Morgan Research undertook some qualitative research in May with this disenfranchised group. A summary of the results are as follows.
The most frequently mentioned problems were related to “poor service”. Comments along these lines included: ”bad customer service at branches, not enough staff”; “service is not as good as it was, staff seem to not be trained enough”; “insensitive in dealings with small customers”; “no personal approach”; ”neglected to call me back”. Overall, these customers feel they are not being valued by their bank.
Fees and Charges
The second-most mentioned areas of concern related to “fees and charges”. These included comments such as: “don’t get value for money”; “the fees they charge are too high”; ”they take back from their customers more than they give out”; ”charges for everything”. These fee issues are not just related to the amount being charged but also to that customers’ feeling that the fees are not reasonable value for what is being provided.
Ethics and Honesty
While problems in this area are ranked in third place, they are clearly of major concern to some customers and to the banks. Comments included: “lack of humanity, no sympathy”; ”no ethics in the banking industry”; ”exposure on ABC Four Corners…”; ”duplicitous…not upfront”; “they ripped me off last year…”; ”sneaky”; “lack of transparency of home loan arrangements”.
Other areas of concern
These problem areas were mentioned less frequently than the top three and included things such as: “branch access ie branch closures”; “interest rates”; “poor communications”; ”poor advice”; “aggressive sales”; ”lack of staff” and “errors”.
Norman Morris, Industry Communications Director, Roy Morgan Research says:
“Although there were some positive signs for the big four in April with small improvements in satisfaction among both home-loan and non-home loan customers, overall satisfaction has been hovering around the current level for two or three years, with no clear upward trend.
“For satisfaction to increase from here, improvements are needed in a number of areas.
“The first of these is the big four’s home-loan customer satisfaction, which remains below that of their non-home loan customers, and as such, is dragging down overall satisfaction levels. The lower rating given by home-loan customers is surprising given the historically low interest rates on loans and low deposit rates. One would expect the latter to be more likely to negatively impact non-home loan customers. Another challenge for the big four is that their home-loan customers have much lower satisfaction levels than the smaller banks’ home-loan customers.
“Our new qualitative research among the relatively small group of dissatisfied customers indicates that more attention needs to be directed to their issues. The main sources of their dissatisfaction are poor service, fees and charges, and ethics and honesty. These and other issues such as branch closures, interest rates and poor communications will need improving if these customers are to be won over.
“Addressing the problem areas of dissatisfied customers would also be likely to increase the satisfaction rating of other customers, so that more become “very satisfied” (rather than just “fairly satisfied”). Improved satisfaction ratings would then increase the likelihood of customers becoming strong advocates of their bank.
“With over 50,000 interviews conducted annually for more than fifteen years, this database enables an in-depth understanding of financial behaviour and trends, providing unique and detailed insights for anyone involved or interested in the financial services market.”
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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