The satisfaction level of the big four bank’s personal customers in the six months to May 2016 was 80.1%, down from 80.2% in April. This decline was due to non-home customers being down by 0.1% point whereas home-loan customers were up a marginal 0.1% point.
These are the latest findings from Roy Morgan’s Single Source survey of 50,000+ people pa.
Home-loan customer satisfaction still lagging
Customer satisfaction with the big four banks remains close to historically high levels and has remained around the 80% mark for the last two years although it has shown some weakness over the last 12 months (down 1.4% points). The satisfaction of home-loan customers (77.8%) remains below that of other customers (80.7%) 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. The drop in the cash rate at the start of May should boost satisfaction among borrowers but has the potential to impact negatively on depositors.
ANZ and CBA maintain satisfaction levels in May
In May, satisfaction with the ANZ was unchanged from April (79.1%) and from 12 months ago.
Consumer Banking Satisfaction
Source: Roy Morgan Research Consumer Banking Satisfaction Report May 2016, average 6-month sample n=25,600
The CBA rating also remained unchanged in May with 81.7% satisfaction but was down by 0.8% points over the last 12 months due mainly to a drop in satisfaction among their home-loan customers. It remains the clear leader among the big four. The NAB declined by 0.4% points in May to 78.5% (down 3.3% points for the year due largely to a big drop in home-loan customer satisfaction) and Westpac was down 0.2% points to 79.2% (down 2.1% points for the year due to a drop in satisfaction among non-home loan customers).
Looking at the banks outside of the big four, Teachers Mutual remains the best performer with a 94.5% satisfaction rating, followed by Heritage Bank (93.5%), Bank Australia (93.1%) and Beyond Bank Australia (90.3%). Overall, the Mutual Banks, with 91.7% satisfaction, remain the pacesetters with the big four lagging behind at 80.1%.
Satisfaction with branch banking showing the biggest decline
In addition to measuring overall customer satisfaction, Roy Morgan Research also measures satisfaction with each of the channels or ways customers deal with their bank. The following chart shows that of the five major channels used by the customers of the big four banks, they have all shown declines in satisfaction over the last year. This is likely to be negatively impacting their overall satisfaction rating.
Satisfaction with Channel Used - Big Four Banks
Source: Roy Morgan Research Single Source; December 2014 - May 2015 (n = 18,569); December 2015 - May 2016 (n = 19,041)
Internet and mobile banking have the highest satisfaction rating as well as being the most popular channels but they too have shown weaknesses over the last year. However, branch banking was the channel to have lost the most ground over the last year, with satisfaction levels declining from 88.6% to 85.1%.
Big four customers less likely to recommend their bank
The extent to which customers are likely to recommend their bank to others (acting as advocates) has become a critical measure of success for growth and customer retention.
The following chart shows that the MFI (main financial institution) customers of the smaller banks are much more likely than those of the big four to recommend their bank to others. Leading the way is ING Direct, with 79.6% of their customers being very likely to recommend them, followed by Bendigo Bank (69.5%) and Bank of Queensland (65.1%).
High Likelihood* of Recommending Bank (MFI)
Source: Roy Morgan Research Single Source; December 2014 - May 2015 (n = 24,083); December 2015 - May 2016 (n = 24,528)
Only around half (52.9%) of the big four’s MFI customers can be regarded as being highly likely to recommend their bank (down from 54.2% 12 months ago). The CBA is the best performer among this group with 54.4%, followed by NAB (53.6%) and ANZ and Westpac (both on 50.6%).
Norman Morris, Industry Communications Director, Roy Morgan Research says:
"Advocacy is becoming an increasingly important measure of success for many banks and the fact that only around half of the MFI customers of the big four banks can be regarded as being high advocates for their bank is a major issue that needs to be addressed, as it is well below the levels of the smaller banks.
“Banks have made good progress for well over a decade in raising overall customer satisfaction to record levels, from less than 60% in 2001 to over 80% currently. The challenge now is to improve satisfaction levels, which is the first step to improving advocacy levels.
“One of the possible contributing factors for satisfaction, which appears to have plateaued at around 80% for some time, is the drop in satisfaction across the various channels or ways people interact with their bank. Although internet and mobile banking now have the highest usage and satisfaction, there are signs that the more traditional branch banking has seen the biggest drop in satisfaction over recent times. Encouraging customers to transfer from branch banking to online will need to be handled with care if these customers are to remain satisfied and be advocates for their bank.
“With over 50,000 interviews conducted annually for more than fifteen years, the Roy Morgan Single Source 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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