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Bank customer satisfaction reaches new record – high income and business customers not so positive

Source: Roy Morgan Single Source, April 2014-September 2014, Big Four Banks (n=19,193); Roy Morgan Business Single Source, April 2014-September 2014 Big Four Banks (n=4,710); Roy Morgan Research Consumer Banking Satisfaction Report, average 6-monthly sample for the Big Four banks (n=18,304)

The satisfaction level of the personal customers of banks reached an eighteen year record high of 82.4% in September, up from 82.3% in August. Not all customers shared this very high satisfaction level, in particular, customers with incomes of $90,000 or more and business customers scored much lower. The big fours’ customers on incomes of $90,000 or more had a satisfaction level of 74.3% and for business customers, satisfaction was only 68.6%.

These are the latest findings from the Roy Morgan Single Source survey of over 50,000 people and 12,000 business decision makers p.a. from the Roy Morgan Business Single Source survey.

In September the CBA retained a narrow lead among overall personal customers of the big four banks with 81.1%, followed by Westpac (81.0%) but with 82.4 % satisfaction for MFI customers (main financial institution) the CBA continued to lag Westpac (83.8%) and ANZ (82.6%).

Big four bank customer satisfaction lowest for higher incomes

For each of the big four banks, the satisfaction of the personal customers declines with increases in their incomes. The following chart shows that the NAB has the highest satisfaction level (84.6%) of the big four for customers with incomes under $45,000 p.a. but the lowest satisfaction for customers with incomes of $90,000 p.a or more (72.0%).

Bank Customer Satisfaction by Personal Income

bank-customer-sat

Source: Roy Morgan Single Source, April 2014-September 2014, Big Four Banks (n=19,193)

Westpac has the highest satisfaction among customers with incomes of $45,000 to $90,000 (79.7 %) and CBA leads in the $90,000 plus group (75.2%).

The significance of looking at customer satisfaction by income levels is due to the need to consider the disproportionate level of financial services held by each income group and the impact that this has on overall profit potential. In other words, raising the satisfaction of the higher income groups is likely to yield a greater result than it would be for lower income groups who have far less potential.

The under $45,000 income group account for 63.6% of the population but have only 36.7% of the total value of financial services. This is in contrast to the $90,000 plus group that accounts for only 11.8% of the population but 31.1% of the value of financial services.

Business customer satisfaction has potential to impact on personal bank customer satisfaction

With more than two million small businesses in Australia and the close link that they have between their business bank and the personal bank of the financial decision maker in the business, a poor result in one market is likely to impact on the other. Around two thirds of financial decision-makers in small businesses have the same personal bank as the business.

Business and Consumer Banking Satisfaction

business-consumer-bank-sat

Source: Roy Morgan Single Source, April 2014-September 2014, Big Four Banks (n=19,193); Roy Morgan Business Single Source, April 2014-September 2014 Big Four Banks (n=4,710)

The overall satisfaction with the big four banks among business customers is currently 68.6 %, compared to 80.7% for personal customers. This major difference is likely to be having a negative impact on the satisfaction level of personal customers. The narrowest gap between the business and personal customer satisfaction levels is among Westpac customers where the difference is only 8.2% points in favour of personal customers, compared to the much higher 14.5 % point gap in favour of ANZ personal customers.

Personal customer satisfaction among the big four banks

In the six months to September 2014, the CBA narrowly maintained its lead position overall among the big four with 81.1%, followed by Westpac (81.0 %), NAB (80.8 %) and ANZ (79.8%).

Consumer Banking Satisfaction: Big Four Banks

consumer-bank-sat-big4

Source: Roy Morgan Research Consumer Banking Satisfaction Report, average 6-monthly sample for the Big Four banks (n=18,304)

Although CBA is the top performer overall , Westpac now leads in terms of MFI satisfaction with 83.8%, followed by ANZ (82.6 %), CBA (82.4%) and NAB (82.1%).

The CBA was the clear leader back in April 2014 with 82.6% but since that date it has declined by 1.5% points due to drop in home loan customer satisfaction of 2.1% points and non-home loan customers declining by 1.4 % points. Over this same period the two biggest improvers were Westpac (up 2.4% points) and ANZ (up 1.6% points).

The decline in CBA satisfaction since April may have bottomed out in Sept when it showed an increase of 0.1% point.

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

“The major banks have made significant progress over the last fourteen years in improving customer satisfaction. In 2000 the overall customer satisfaction level of bank customers was below 60% and this has now risen to over 80% because of a concerted effort by all the banks to improve their customer focus following the sharp downward trend in the late 1990’s.

“The issue now facing the banks is how to raise the satisfaction and advocacy levels of the customers who offer the greatest business potential. We have seen here that the customers with the lowest satisfaction levels are the personal customers on higher incomes ($90,000 plus) and business customers. Both of these groups offer the greatest potential and yet their satisfaction levels are well below the lower value customers and are in fact back at the levels seen for the overall market that we saw five years ago.

“While the big four banks have been competing strongly for the number one overall satisfaction rating, they are all well behind in the satisfaction rating of their higher income and business customers where the greatest potential lies.

“The fact that the big four banks are now only separated by 1.3% points in their overall satisfaction ratings means that none of them have a clear competitive market advantage compared to the 2004 to 2009 period where the ANZ was well ahead.

“The challenge for the banks is to create a clear satisfaction and advocacy leadership positioning among the higher value customers or they will face increased competition from specialised banks and other financial institutions that will focus solely on these lucrative segments.”

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About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2