Bank satisfaction rises for first time since RC kick-off

The latest findings from Roy Morgan’s Customer Satisfaction – Consumer Banking in Australia report, which involved a survey of over 4,000 bank customers in November 2018, bank satisfaction improved marginally, from 78.0 per cent in October to 78.1 per cent – the first monthly improvement since the start of the financial services royal commission in January 2018.

Roy Morgan noted that since the commencement of the royal commission, the level of bank satisfaction dropped 3.1 per cent, but remains above the long-term average of 74.3 per cent reported since 2001 and “well up” on the 58.7 per cent low of January 2001.

The Roy Morgan research also revealed that the level of indifference (neither satisfied or dissatisfied) among respondents is higher than the level of dissatisfaction.

The research found that the level of dissatisfaction with banks has increased from 4.9 per cent in January 2018, prior to the royal commission, to 5.6 per cent in November 2018, while the level of indifference increased from 14 per cent to 16.3 per cent over the same period.

Roy Morgan claimed that the combination of indifference and dissatisfaction levels means that more than one in five (21.9 per cent) of bank customers “pose a potential threat to customer retention”, an increase from 18.9 per cent in January 2018 but below the 2001 level of 40.1 per cent.

Larger lenders most affected by RC

Moreover, the Roy Morgan research found that the royal commission had the greatest impact on satisfaction with larger banks.

The sharpest drop in satisfaction since the start of the royal commission was reported among Westpac customers (5.5 per cent), followed by NAB and Bankwest (4.5 per cent), and ANZ (4.3 per cent).

According to Roy Morgan, ING and Bendigo Bank were the only lenders to report increases in satisfaction, rising 3.6 per cent to 88.8 per cent and 0.1 of a percentage point to 88.5 per cent, respectively.  

Additionally, Roy Morgan reported that the Commonwealth Bank of Australia (CBA) retained its position of having the highest satisfaction among the big four with 76.7 per cent, followed by NAB (74.6 per cent), ANZ (74.3 per cent) and Westpac (72.4 per cent).

Reflecting on the research, Norman Morris, Roy Morgan’s industry communications director observed: “Given the large volume of negative publicity generated by the finance royal commission and other issues, it is not surprising that satisfaction with banks [declined in 2018]

“It is important to note, however, that contrary to all the negative reporting on banks, the clear majority of their customers are satisfied with them and that less than 6 per cent claim to be dissatisfied.

“Despite a small decline in bank satisfaction this year, current levels remain above the long term average over the period from 2001 and in fact are 19.4 per cent points above the level recorded in that year”

However, Mr Morris said that the release of the royal commission’s final report in February could place additional downward pressure on bank satisfaction levels.

“The scheduled release of the final finance royal commission report in February 2019 is likely to represent a major challenge to maintain satisfaction levels as it is anticipated that it will recap on a lot of problem areas and receive widespread publicity,” he concluded.

[Related: Use of bank branches dwindling: Roy Morgan]