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Satisfaction and NPS® of big four banks improving after Finance Royal Commission

Source: Roy Morgan Single Source (Australia). Average 6 month sample n = 25,242. Base: Australians 14+
Satisfaction and NPS® levels of the big four banks declined following the Finance Royal Commission. However, there are signs over the last two months that things are trending up. In April, satisfaction with the big four reached 75.9%, up by 0.6% points since February and NPS® was 0.4, up from minus 1.6. These satisfaction and NPS® scores remain below the pre Finance Royal Commission levels but are showing positive signs of potential recovery in customer ratings.

These are some of the latest findings from Roy Morgan’s ‘Customer Satisfaction report on Consumer Banking in Australia’ and the ‘Financial Institutions Advocacy Report’. These reports are based on in-depth interviews conducted face-to-face with over 50,000 consumers per annum in their homes. This large sample of bank customers over many years enables an accurate understanding of long term trends rather than being distracted by what often turns out to be a short term events. The latest data in this release is for the six months ended March 2019.

Despite improvement the big four trail the smaller banks

The following chart shows that the banks outside of the big four currently have a satisfaction rating of 83.8%, well ahead of the big four on 75.9%. It appears that the focus of the Royal Commission on the big four may have had a bigger impact on their rating which is now down by 3.3% points from prior to the commission, compared to a decline of only 1.1% points for the banks outside of the big four.

The CBA has the highest satisfaction among the big four with 78.1%, followed by Westpac (74.7%), ANZ (74.4%) and NAB (72.7%). Among the major smaller banks, Bendigo Bank has the highest rating with 90.1%, followed by ING (89.9%).

Bank Customer Satisfaction


Source: Roy Morgan Single Source (Australia). Average 6 month sample n = 25,242.
Base: Australians 14+


Big four customer NPS® scores almost recovered from Royal Commission

One of the customer metrics used by banks is the Net Promoter Score (NPS®) among customers who consider them to be their ‘main financial institutions’ (MFI Customers). In the period leading up to the Royal Commission in late 2017 and shortly after, there was a positive trend in NPS® for MFI bank customers of both the big four and the smaller banks. The NPS® for the big four declined through to November 2018 but the smaller banks maintained a generally positive trend during this period. The April data shows that the big four have recovered to a marginally positive NPS of 0.4 and closing the gap on their pre Royal Commission level of 2.8.

The banks outside of the big four continue to have higher NPS® scores, with the latest figure for April 2019 being 24.0 compared to the big four on 0.4. These smaller banks now have higher NPS® than prior to the Royal Commission when it was 23.4.

NET PROMOTOR SCORE (NPS®) MFI1 Banks 2014 - 2019

Source: Roy Morgan Single Source (Australia). Average 6 month sample n = 25,242.
Base: Australians 14+. Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Mr Frederick Reichheld and Satmetrix Systems, Inc. Based on score of 9 or 10 minus 1 to 6 on a ten point scale, where one is very unlikely to recommend to a friend or colleague and ten is very likely. 
1. Main Financial Institution.

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

”It is not surprising that over the last year there has been a decline in satisfaction and NPS® of the big four banks following the high level of negative publicity generated by the Finance Royal Commission. What we are seeing recently however are positive signs in improving customer attitudes towards their banks as adverse publicity declines and findings are implemented by banks.

“A major challenge remaining for the big four banks is to reduce the increasing lead that the smaller banks have in satisfaction and NPS®. In order to do this it is important for the big four to understand the many factors that drive the level of customer satisfaction and advocacy in banks, so as to prioritise improvements. These drivers are dealt with in detail in the Roy Morgan ‘Drivers of Advocacy-Consumer Banking Market Report’ and the ‘Drivers of Customer Satisfaction-Consumer Banking Market Report’. Both of these reports also provide a detailed analysis of the factors that drive advocacy and satisfaction for each of the major banks.

“The data used here is only a small part of the consumer finance data available from Roy Morgan. The full database enables a truly holistic and unique understanding of consumer’s financial behaviour and trends gathered from 50,000 consumers per annum, across more than two decades. To find out more ask Roy Morgan.”


For comments or more information please contact:
Norman Morris, Industry Communications Director
Office: +61 (03) 9224 5172
Norman.Morris@roymorgan.com


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%

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