Bank satisfaction recovery could be short lived

The latest findings from Roy Morgan’s Customer Satisfaction-Consumer Banking in Australia Report, which is based on a continual survey of 4,000 bank customers per month, have revealed that satisfaction with the banks improved marginally in December 2018, up from 78.1 per cent in November to 78.2 per cent.

The latest results follow a similar increase in the month to November, when satisfaction rose from 78.0 per cent, improving for the first time since the onset of the financial services royal commission.

According to Roy Morgan, the negative spotlight placed on banks throughout the Hayne inquiry hearings triggered a cumulative 3.2 per cent fall in satisfaction over the nine months following the commencement of the commission’s proceedings in January 2018.

Norman Morris, industry communications director at Roy Morgan, observed: “It is positive to see small improvements in bank satisfaction over the last two months, following the decline throughout most of 2018.

“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 over the year.”

However, the research house noted that bank satisfaction remains above the long-term average of 74.3 per cent calculated since 2001 and almost 20 per cent higher than the 58.7 per cent recorded in January 2001.

The research also reported that as of December, 5.6 per cent of surveyed respondents said they were dissatisfied with their bank, with the level of indifference also rising to 16.2 per cent.

Roy Morgan claimed that the combination of indifferent and dissatisfied customers means that more than one in five (21.8 per cent) of bank customers “pose a potential threat to customer retention”.

Mr Morris added that he expects the release of Commissioner Kenneth Hayne’s final report to “represent a major challenge to maintain satisfaction levels”, with the report expected to recap “problem areas” and “receive widespread publicity”.

Mortgage customers weighing on overall satisfaction

Further, the Roy Morgan research revealed that since 2011, satisfaction among mortgage customers has been lower than those who do not have a mortgage, with the gap increasing throughout 2018.

As of December, mortgage customer satisfaction levels (73.4 per cent) were 4.9 per cent lower than non-mortgage customers (78.3 per cent).

Mr Morris attributed the widening of the gap to out-of-cycle interest rate increases from banks.

“Mortgage customers of the banks have shown more rapid declines in satisfaction than other customers over the last year, negatively impacting overall satisfaction,” he said.

“It is likely that declines in mortgage customer satisfaction are as a result of out-of-cycle rate increases by some banks and tougher lending conditions due to the royal commission.”

ING and Bendigo Bank spared from RC decline

Of the 10 largest consumer banks, Roy Morgan reported that only ING (up 4.1 per cent) and Bendigo Bank (up 0.5 per cent) recorded an increase in customer satisfaction from prior to the commencement of the royal commission.

The biggest declines in satisfaction were from Bankwest customers (down 6.0 per cent), followed by Westpac (down 5.9 per cent), ANZ (down 4.4 per cent), and NAB (down 4.1 per cent).

The Commonwealth Bank of Australia retained its position of having the highest level of customer satisfaction among the big four with 77.1 per cent, followed by NAB (75.0 per cent), ANZ (74.2 per cent) and Westpac (72.0 per cent).

[Related: Bank satisfaction rises for first time since RC kick-off]