The rapid decline in the ASX at the end of 2007 and throughout 2008 had a major impact on how people felt about their finances. This was shown by the big drop in the proportion feeling “financially stable” which declined from 61.6% in 2007 to 56.5% in2008 and 57.2% in 2009. By 2010 confidence was improving reaching a figure of 61.6% before declining over the following two years. During the last three years it has been very steady in the 60.2% to 60.5% range.
Macquarie customers feel the most financially stable and the big four lag
People who are customers of banks feel more stable regarding their finances (61.1% agree) than those who don’t deal with banks (50.2% agree).
There is however considerable variation in how the customers of the major banks currently feel regarding the state of their finances. As may be expected, the banks with the more affluent customers have the highest ratings, such as Macquarie (70.6% feel financially stable), ING Direct (68.8%) and Citibank (67.8%). The major banks with the lowest ratings are Bendigo Bank (59.5%), CBA (60.0%) and Bank of Queensland (60.8%). The highest ratings among the big four banks were the ANZ (64.4%), Westpac (62.4%) and NAB (62.0%).
Norman Morris, Industry Communications Director, Roy Morgan Research, says:
“Our analysis of the last ten years regarding how people feel about their financial position has shown that it is very difficult to make any substantial long term gains. In an increasingly volatile global market this is likely to present a major challenge to governments and financial institutions if they are to improve how the population and customers feel about their financial position.
“Feeling financially stable or secure is a very important metric for banks to measure their customers on because it is likely to lead to more confidence in acting on all aspects of financial decision making, including borrowing, saving, investing and spending.
“Although the upmarket banks customers generally feel more confident about their financial position they are likely to be more sensitive to market movements due to their greater financial involvement. On the other hand, the banks with the lower value customer base such as the CBA and Bendigo Bank have the challenge of dealing with less confident customers.
“Roy Morgan is in the unique position of having a comprehensive understanding of all aspects of each bank’s customers and their financial position. By combining this holistic financial data with attitudinal information, financial institutions gain valuable insights into targeting their communications more effectively.”
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