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Australia’s major banks’ satisfaction performance has not kept pace with best practice between 2001 and 2005. However in NZ the same banks have very different performance results.

Between June 2001 and June 2006 ING Direct, Bendigo Bank and HSBC have all maintained a position as benchmark satisfaction performers in the Australian banking industry and increased their penetration into the Australian market. Data collected in face to face interviews by Roy Morgan Research over the six months to June, 2006, shows that these relatively new entrants to the Australian banking market have outperformed the major banks in their levels of satisfaction leading to increased penetration of the deposits market.

Over the same period only ANZ among the six largest banks managed to increase its customer penetration in the deposit market, overtaking the NAB to achieve third highest penetration in this crucial market segment. While all the six largest banks increased satisfaction, only ANZ’s increase was large enough relative to its rivals to win increased penetration against competitors, such as Bendigo Bank and ING Direct, with much higher satisfaction levels overall.

Table 1: Australian Satisfaction Levels and Deposit Customer Penetration, 2001-2005
(Period: 6 months to June, 2001, and 6 months to June, 2006; Sample: 29,310 and 29,090 Australians aged 14+)

Australian Financial Institution		Six months to June 2001	Six Months to June 2006	% Change
ING Direct	% Penetration*	0.6	3.8	+3.2
	% Satisfied**	84.9	89.8	+4.9
Bendigo Bank	% Penetration*	2.9	4.5	+1.6
	% Satisfied**	83.1	86.8	+3.7
HSBC	% Penetration*	0.4	0.9	+0.5
	% Satisfied**	77.9	82.4	+4.5
ANZ	% Penetration*	12.8	14.3	+1.5
	% Satisfied**	58.8	74.6	+15.8
Commonwealth	% Penetration*	40.5	35.5	-5.0
	% Satisfied**	55.3	62.4	+7.1
NAB	% Penetration*	14.3	12.4	-1.9
	% Satisfied**	53.4	67.9	+14.6
Westpac	% Penetration*	17.8	15.6	-2.2
	% Satisfied**	55.5	66.3	+10.8
St George	% Penetration*	10.5	9.8	-0.6
	% Satisfied**	65.8	75.4	+9.7
Suncorp	% Penetration*	4.0	3.7	-0.3
	% Satisfied**	68.4	76.2	+7.8

* “Penetration” is the proportion of Australians aged 14+ who have a deposit account with the financial institution.
** “Satisfied” is the proportion of all those with deposit accounts at the financial institution who are “Very” or “Fairly” satisfied with their overall relationship with the financial institution (from a five point scale).

Norman Morris, Global Finance Industry Director at Roy Morgan Research, says:

“This analysis shows the importance to the major banks of measuring their satisfaction performance against all players in this market and not just against the other majors and their own trend over time. To maintain or increase market penetration, satisfaction levels for the major banks must get much closer to the market leaders.”

Roy Morgan Research’s Single Source data provides the most comprehensive and in-depth analysis possible for bank satisfaction data. The data is collected in more than 55,000 face to face interviews each year and includes all financial institutions where respondents hold their deposit accounts, not only data on their main financial institutions. The same data is also collected in more than 12,000 interviews per annum in New Zealand, providing a unique capability to directly compare the satisfaction performance of Australasian banks in both Australia and New Zealand markets.

Comparing Performance of the Major Banks in Australia and New Zealand

Chart 1: ANZ Customer Satisfaction Performance: Australia and New Zealand

Chart 1 shows that between May 2003 and May 2006 ANZ in Australia has continued to outperform its peer group, the Big 4 Australian banks. Over that same period ANZ NZ has also improved its performance, however it has remained below the average performance of the Big 5 NZ banks. Also during this period ANZ acquired National Bank of New Zealand (NBNZ), which it continues to operate as a stand-alone brand in the NZ market. While NBNZ used to be one of the strongest satisfaction performers in the NZ market, since early 2006 its performance has deteriorated sharply, although it has not yet fallen below the average for the Big 5.

In contrast to ANZ, CBA and its NZ subsidiary ASB have shown remarkably little change between May 2003 and May 2006. CBA, which has consistently underperformed compared to the Big 4 Australian banks in satisfaction terms, continues to under perform. Meanwhile ASB maintains its position as one the best performers in NZ, consistently achieving satisfaction scores greater than 80%, well above the average for its peer group.

Chart 2: CBA Customer Satisfaction Performance: Australia and New Zealand

Chart 3 shows steady progress by the NAB in improving its satisfaction performance relative to its Australian peer group, finally rising above the average for the Big 4 during the first half of 2006. However in NZ NAB’s subsidiary BNZ has had a more uneven satisfaction performance, mostly falling below the average for its Big 5 peer group. Overall, satisfaction for NAB and BNZ appears to be converging during the last 3 years to a similar level in both countries.

Chart 3: NAB Customer Satisfaction Performance: Australia and New Zealand

Westpac in Australia has consistently been ahead of its peer group in satisfaction scores between 2003 and 2006, however the reverse case applies for its NZ operations, where Westpac consistently fails to meet the standards set by its immediate rivals. During 2006 Westpac has suffered a decline in satisfaction ratings in both the Australian and New Zealand markets, however the damage appears to be more noticeable at its NZ subsidiary.

Chart 4: Westpac Customer Satisfaction Performance: Australia and New Zealand

Table 2: Summary Satisfaction Levels in Australia and New Zealand for Major Banks
(Period: 6 months to May, 2003 and 6 months to May, 2006; Sample: 29,246 and 28,723 Australians aged 14+; 6,264 and 5,940 New Zealanders aged 14+)

Parent Company		Six Months to May 2003	Six Months to May 2006	% Change
ANZ	Australia	63.8	74.7	+11.0
	New Zealand	60.5	67.2	+6.7
	NBNZ	79.9	74.5	-5.4
CBA	Commonwealth	56.3	62.9	+6.6
	ASB	80.8	80.0	-0.7
NAB	NAB	59.5	68.7	+9.2
	BNZ	66.8	70.0	+3.2
Westpac	Australia	60.7	67.4	+6.7
	New Zealand	63.3	62.7	-0.7

About Roy Morgan Research:
Roy Morgan Research is the largest independent Australian research company, with offices in each state of Australia, as well as in New Zealand, the United States, the United Kingdom and Indonesia. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has more than 60 years’ experiences in collecting objective, independent information on consumers. In Australia, Roy Morgan Research is considered to be the authoritative source of information on financial behaviour, readership, voting intentions and consumer confidence. Roy Morgan Research is a specialist in recontact customised surveys which provide invaluable and effective qualitative and quantitative information regarding customers and target markets.

For comments or further detail, please contact:

Norman Morris - Roy Morgan Global Finance Industry Director
Email: Norman.Morris@RoyMorgan.com
Telephone: +61 (03) 9224 5172
Mobile: 0402 014 474

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