Major bank customers disloyal: survey
While the big four banks have made small gains in product cross-selling since 2010, the average bank customer continues to deal with over four financial institutions, according to Roy Morgan.
The results showed CBA group had the best performance in terms of customer loyalty even though its customers still deal with an average of 4.1 financial institutions.
This was followed by Westpac group whose customers deal with 4.6 institutions on average, ANZ group at 4.7 and NAB group at 4.9.
Customers of foreign banks such as Citigroup, ING Direct and HSBC tended to deal with a greater number of financial institutions with Citigroup customers dealing with an average of 6.3 institutions, followed by ING Direct at 6.3 and HSBC at 5.8.
Roy Morgan said this is likely due to the fact all three are foreign banks and generally attract more upmarket customers with special or more complex needs that result in them using a larger number of financial institutions.
CBA Group was also found to be the most successful in terms of the share of customer products held, with CBA products accounting for 37.8 per cent of the total products held by CBA customers.
This was followed by Westpac group with a share of 32.8 per cent, ANZ group at 29.9 per cent and NAB at 27.8 per cent.
The results also indicated CBA had the largest share of its customer’s wealth holding around 34.3 per cent of its customer’s money.
Roy Morgan director of industry communications Norman Morris said the survey shows consumers are exercising choice across all financial products as evidenced by the fact that the customers of the major banks deal with more than four financial institutions and generally have only about one-third of their products with any one bank.
“While most institutions have made some small gains in product cross-sell since 2010, overall they have not performed well,” said Mr Morris.
“Reasons for this include lack of incentive for customers to consolidate, competition from specialist providers such as for superannuation and insurance, lack of product awareness, some concern regarding the spread of risk and staff that may not feel confident in a selling role.”
Mr Morris said it is clear there is considerable competition in the market, which presents both opportunities and challenges for all major players if they are to consolidate their customer’s business.