Monday, September 23rd, 2013
Despite a strong focus on customer retention, over one million customers stopped dealing with their financial institution in the last 12 months, according to the latest findings from Roy Morgan Research.

Despite a strong focus on customer retention, over one million customers have stopped dealing with a financial institution in the last twelve months. The majority, 855,000 people, ended a relationship with a bank, 18,000 people stopped dealing with a building society, while 65,000 stopped dealing with a credit union and 140,000 with some other financial institution. These are the latest findings from the Roy Morgan Research Consumer Single Source survey.

Among the major four banks, ANZ had the highest proportion of customers at 4.0% (157,000) who have stopped dealing with them in the last 12 months. The CBA, who has the largest customer base in Australia, had 192,000 people ending their relationship (2.7% of customers), slightly lower than Westpac at 3.0% (108,000). NAB had the lowest proportion of lost customers among the major four banks with 2.3% or 70,000.

Among the smaller banks, 5.6% of Bankwest’s customers stopped dealing with them, followed by 5.2% for ING Direct, 3.8% of St George customers and 2.9% of Bendigo Bank customers.

Source:Roy Morgan Consumer Single Source, 6 months to July 2013, n = 25,132. Any Financial Services customers stopped dealing with a financial institution in the last 12 month, n= 1,371

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

“At a time when people are continuing to find it easier to swap financial institutions, many of the banks are placing a strong focus on customer retention and are keen to increase the value of the relationship. While tracking and benchmarking the proportion of lost customers is an important measure, it is interesting to note that the potential value of these lost relationships will vary across the banks. For instance, the potential lost opportunity on people who stopped dealing with CBA is the 7.9 financial products they hold anywhere, compared to 8.7 products by those who ended their relationship with ANZ and 10.7 products held on average in total by lost Bankwest customers.

“It would be helpful for the banks to look at which financial institutions their lost customers are now choosing to deal with and gain an understanding of the reasons behind their choice. For instance, our research shows the key reasons why people switched their Main Financial Institution include high fees and charges, poor service and poor interest rates.”

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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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