Following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, new figures have revealed that almost half (42 per cent) of Aussies who bank with one of the major institutions have no faith in their bank.
J.D. Power released the results of their 2018 Australia Retail Banking Satisfaction Study on Tuesday, highlighting serious concerns among the Australian public about the financial services industry, with consumers worrying about issues such as a lack of clear information and poor communication between them and their bank.
The study of more than 4,000 retail banking customers revealed that while 42 per cent of customers with the ‘Big Four’ did not trust their institution, those who bank with Westpac emerged as the most satisfied, compared to customers of Commonwealth Bank, ANZ and NAB.
On a scale of 1,000, Westpac emerged with a score of 731 which placed it “among the best” in Australia. The points are racked up according to overall satisfaction in six areas including account activities, fees, product offerings, account information, facility and problem resolution.
CommBank and ANZ tied in second place with a score of 728, however NAB fell short of the pack and landed the lowest ranking of the Big Four. Scoring just 721, NAB’s score actually placed the institution lower than the average across those four.
The results then showed that one in five (18 per cent) customers with major banks also said they would most likely switch to another provider within the next 12 months.
“Traditionally, the bank-customer relationship is built on trust. When trust is compromised, customers may bank elsewhere, particularly when alternative providers are so readily available,” said Anthony Chiam from J.D Power.
“Over time, as customers weigh their options, this will undoubtedly have a financial impact on banks. To compete in this new climate, banks need to go back to basics through both traditional and digital channel interactions, which will provide a more customer-centric experience and build brand loyalty.”
However the Big Four were all trumped by ING which received an overall satisfaction score of 864, with the highest score in four of the six areas. ING ranked the highest of all non-major financial institutions, followed by Greater Bank (829), Heritage Bank (818), People’s Choice Credit Union (816) and CUA (794).
The percentage of customers of non-major financial institutions who do not trust their bank was also lower, with just 24 per cent expressing concern in this area however the same number said they would not recommend their bank to their friends and family.
The study also found that over one third (35 per cent) of customers with major banks and a quarter (24 per cent) of customers with other financial institutions did not receive clear information on items such as fees charged to their account, highlighting a need for transparency and a clearer channel of communication between banks and customers.
It was also revealed that 45 per cent of customers who had a problem solved over the phone were not pleased with their overall experience, almost one quarter did not receive a simple “thank you” on their last branch visit and just under half (48 per cent) of customers do not completely understand which mobile banking products and services are available to them.
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