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Banks keeping lower-value customers happy but high-value and business customers left behind

Source: Roy Morgan Research Consumer Single Source, January 2014-June 2014, n=23,456; Roy Morgan Research Business Single Source, January 2014-June 2014, n=3,819.
The satisfaction level of the personal customers of banks improved to a new record high of 82.2% in June, up from 82% in May, and is now at its highest level in the 18 years since this survey began. The satisfaction of business customers in June improved by 1.0% point to 65.4%, leaving them well behind the rating given by personal customers. These are the latest findings from the Roy Morgan Research Consumer Single Source survey of over 50,000 people per annum and Business Single Source survey of more than 13,000 business finance decision makers per annum.

Business and high-value personal customers less satisfied

In the six months to June 2014, the highest satisfaction level for personal banking customers was among the lowest-value quintile at 85.9%, compared to 79.1% for the top-value quintile and only 65.4% for business customers.

All four major banks show much lower levels of satisfaction for their business and higher-value customers compared to their low-value customers. The NAB has the highest satisfaction of the Big Four among the lowest-value quintile (87.5%), the CBA has the highest satisfaction with the top quintile (78.7%), and Westpac performed best among business customers (70.9%).

Business and Consumer Banking Satisfaction: Big Four Banks

business-consumer-banking-satisfaction

Source: Roy Morgan Research Consumer Single Source, January 2014-June 2014, n=23,456; Roy Morgan Research Business Single Source, January 2014-June 2014, n=3,819. *Value based on total value of loans, superannuation, managed funds, accounts, card outstandings and other products (excluding insurance) held anywhere. ** Includes banks not shown.

Personal customer satisfaction increases to record high

In the six months to June 2014, the CBA maintained its leading position among the Big Four with 82.1% satisfaction, followed by NAB (80.4%), Westpac (79.9%) and ANZ (79.1%). The biggest improver among the major banks over the last month was Westpac (up 0.9% points), followed by the ANZ (up 0.5% points), the CBA (up 0.1% points) and NAB (down 0.3% points). It is worth noting that nearly all of the smaller banks are still well above the rating given to the best of the Big Four, with some scoring above 90%.

Consumer Banking Satisfaction

consumer-banking-satisfaction

Source: Roy Morgan Research Consumer Banking Satisfaction Report, June 2014; Average 6 monthly sample for Big Four banks (n = 18,286).

Over the last 12 months Westpac showed the largest improvement in satisfaction (up 1.8% points) followed by the CBA (up 1.4%), the NAB (up 1.3% points) and ANZ (up 0.6% points). Westpac’s improvement was a result of their non-home loan customers increasing their satisfaction, whereas their home loan customers showed a decline in satisfaction. CBA gained from home loan and non-home loan customers. Satisfaction among NAB’s home loan customers declined over the last 12 months (down 3.3% points), but improved among other customers. The ANZ showed an improvement among home loan customers but no change among other customers. All four major banks still have lower satisfaction levels among their mortgage customers than their non-mortgage customers.

Business customers remain well behind

While business banking satisfaction for banks has continued to increase over the last year (up 1.2% points), consumer satisfaction has also increased by a similar magnitude (up 1.1% points), leaving the current gap much the same as a year ago, ie. 16.8% points in favour of consumers (82.2% compared to 65.4%). In June 2014, Westpac remained on top with business customers with 70.9% satisfaction, followed by ANZ (66.0%), NAB (65.9%) and CBA (63.4%).

Business Banking Satisfaction

business-banking-sat

Source: Roy Morgan Research Business Banking Satisfaction Report, June 2014; Average 6 monthly sample for Big Four banks (n = 6,513).

Business satisfaction with major products low

Businesses are showing very low satisfaction levels for Transaction/Deposit Accounts, Loans and Relationship Managers/Business Bankers, which is obviously having an impact on the low overall satisfaction levels seen. Westpac has the highest satisfaction level of the Big Four for the three areas shown, in line with its top ranking seen earlier. The CBA scores lowest for loans (59.3%); the NAB scores lowest for Relationship Managers (63.7%); and the ANZ (61.8%) has the lowest rating for Transaction/Deposit Accounts.

Business Satisfaction with Accounts, Loans and Relationship Managers

business-sat-major-products

Source: Roy Morgan Research Business Single Source, January 2014-June 2014, n=3,819

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

“Satisfaction among banks’ personal customers is at a new record high but closer examination of the data shows that banks have their highest satisfaction levels by far among the bottom quintile of their personal customers. Although this group accounts for 20% of bank customers, they account for only 0.2% of bank business. At the other end of the scale, the top 20% of customers (who represent 64% of the business) have the lowest satisfaction levels.

“Improving satisfaction among low-value customers should not be the focus if there is very little to be gained by doing so. The challenge is to increase satisfaction at the top end. The relatively low satisfaction among business customers is also likely to be impacting negatively on banks’ business growth, as the potential value to be gained from this group is considerable.

“Despite recent moves by the major banks to show an increased focus on their business customers over the last 12 months, satisfaction levels remain low and are well behind that of their personal customers. Banks continue to lack empathy with their business customers, who require more attention and understanding. This is evidenced by the fact that these customers rate their banks very poorly on ‘maintaining regular contact’, ‘following developments in the industry’ and having a ‘good understanding of their business’.  

“To overcome this problem, banks use business managers to manage relationships with their clients, but at this stage satisfaction with these managers remains relatively low at around 68% for the major banks.

“The Financial System Inquiry Interim Report recognises that there are a number of issues faced by SMEs in obtaining funding from banks and these are likely to be playing a major part in keeping their satisfaction levels low. Banks appear to be much more willing to lend for housing than they are for less secure business purposes, particularly new businesses.”


For comments or more information please contact:

Norman Morris, Industry Communications Director
Telephone: +61 (3) 9224 5172
Mobile: +61 402 014 474
norman.morris@roymorgan.com

Please click on this link to the Roy Morgan Online Store

View more information on the Australian Consumer Banking Satisfaction Monthly Report.

View more information on the Australian Business Banking Satisfaction Report.

About Roy Morgan Research Consumer Single Source

Roy Morgan Single Source is based on over 50,000 interviews each year and has been designed and engineered to represent the ideal source model. It provides an integrated understanding of consumers; what they are like, what they consume, what they buy, what they think, what they want, what they watch, read and listen to. The overriding benefit of Roy Morgan Single Source is the strategic insights it offers in the ability to link many aspects. Not only can an organisation’s profitable customers be delineated by what they think, do, watch, but so can non customers. Hence brand positioning, product differentiation, merchandising, efficient media planning, market expansion and line extension opportunities can all be considered in the light of the correct understanding of the marketplace.

About Roy Morgan Business Single Source

The Roy Morgan Research business survey covers businesses from every industry, size and locality in Australia. The survey based on over 13,000 business decision makers per annum covers all aspects of business finance so as to be comparable with the well established Roy Morgan Consumer Single Source. Roy Morgan Business Single Source is designed to provide the ideal Business single source model. It not only provides a comprehensive understanding of the business finance market, but also detailed insights into the personal finances of business finance decision makers.

The Roy Morgan Business Survey includes a monthly measure of the level of confidence or outlook for Australian businesses. It looks at how businesses view their own position and prospects, and more broadly how they feel about the direction of the overall economy. The analysis covers all major industry sectors, size of business and location.

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 and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan Research has over 70 years’ experience 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.

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