Roy Morgan’s Single Source survey of more than 50,000 consumers reinforces the negative impact the banking royal commission has had on customer satisfaction, with 78.5 per cent indicating their satisfaction with their banks in May, compared to 82.3 per cent in January, prior to the commencement of banking royal commission hearings.
The May figure is also the lowest recorded in six years, but it is still above the 60 per cent recorded in January 2001, the market research firm noted.
According to the study, 6.2 per cent of survey participants indicated outright dissatisfaction with their banks in May, compared to 4.6 per cent in January; 15.3 per cent expressed neither satisfaction nor dissatisfaction, up from 13.1 per cent in January, which Roy Morgan said “poses a potential threat to customer retention”; and 78.5 per cent said they were satisfied with their banks, down from 82.3 per cent in January.
Roy Morgan’s study also demonstrates a weakening in customer advocacy, with 12.2 per cent of respondents expressing that they would be highly unlikely to recommend their banks to others in May, up from 9.4 per cent in January.
Customers that were indifferent when it comes to advocating for their banks dropped from 37 per cent in January to 35.4 per cent in May, while 52.2 per cent said they would be “highly likely” to recommend their banks to others, down slightly from 55.4 per cent in February and 53.5 per cent in January, before the royal commission hearings began.
However, the industry communications director at Roy Morgan, Norman Morris, said that the decline in bank customer satisfaction and willingness to advocate can be attributed to a number of factors, not just negative publicity around the banking royal commission.
“Apart from the potential for adverse publicity to impact on bank customers, our modelling shows that many other factors that directly affect them drive bank advocacy and satisfaction levels. These include areas such as interest rates, fees and charges, customer experience, reliability, security and product offering,” Mr Morris said.
An earlier study from the market research firm revealed that customer satisfaction was highest for non-major banks in the six months ending on 31 March 2018, with these banks ranking in the top five of the 10 largest banks, while the majors ranked in the bottom end of the list.
Bendigo Bank topped the list, with a customer satisfaction rating of 87.5 per cent, followed by ING (87.1 per cent), St. George and Bankwest (tied with 84.6 per cent), and Bank of Queensland (83.1 per cent).
Suncorp was the only non-major on the list to fall below the average of 80.9 per cent and to score a lower customer satisfaction rating than a major bank (79.0 per cent).
Commonwealth Bank, which placed sixth on the list, scored the highest customer satisfaction rating of the big four (79.7 per cent), followed by NAB and ANZ (78.7 per cent), and Westpac (77.7 per cent).
In another survey of more than 1,000 Australians conducted by Essential Media, almost a third of respondents, or 32 per cent, said they were more likely to consider switching banks in the wake of the royal commission’s findings.
The study found those aged between 35 and 54 were the most likely (35 per cent) to consider switching their banking institution, while only 6 per cent of this cohort were less likely to do so, according to the COBA study.
This was only marginally higher than the 33 per cent of 18- to 34-year-olds who said they were more likely to consider swapping (with 9 per cent saying they were less likely to consider changing).
Those above 55 were the least likely to switch, with only 24 per cent saying they were more likely to contemplate a change, while 11 per cent of this group said that the royal commission had made it less likely they would consider changing.
What do you think about the major banks? The last 12 months have been challenging for the big banks. Rising funding costs have continued to pressure margins, leading to pricing changes towards the end of 2017. Meanwhile, regulatory measures and higher capital requirements are forcing the big four to tweak their policies.
Which lenders have continued to deliver excellent product and service, and which lenders have communicated the myriad changes best?
This is your chance to let us know what you really think in the Third-Party Lending Report: Major Banks survey for 2018.
[Related: Customers most satisfied with non-majors]