75% think banks are prioritising profit over service

The Customer Owned Banking Association (COBA) has released new data that showed Australians believe customer service is taking a back seat to profits at the banks.

The research, conducted by strategic research consultancy Pollinate on behalf of COBA, surveyed 400 Australians and said that 75 per cent of Australians felt most banks prioritise profit rather than customer service.

The research also said that respondents believed customer-owned banks offered a better and more personalised service.

Indeed, the mutual banking sector has been growing.

According to quarterly authorised deposit-taking institution statistics from the Australian Prudential Regulation Authority (APRA), mutual bank housing loans grew 9 per cent in the December quarter, nearly double the rest of system (which grew 4.2 per cent in the quarter).

Further, mutual ADI deposits had an annual growth of 7.5 per cent compared to 3.8 per cent system.

COBA said there was a growing “customer shift towards mutual banks and credit unions”, which now serve more than 5 million Australians.

COBA’s chief executive Michael Lawrence said: “Many Australians are drawn to the customer-owned banking sector because they want a bank that offers competitive rates, excellent customer service and has a positive impact on society.”

The association head said that the difference between customer-owned banks and major banks was that customer-owned banks invest their profits back into products and services as well as in community support engagements.

Speaking on the benefits of customer-owned banks, Lawrence said: “Our banks treat their customers like a valued customer, rather than just a number. What gives the customer-owned banking sector that competitive edge is that our 55 member banks and credit unions are incredibly diverse.

“This means they have a deep understanding of their customers and the communities they serve, which is why they can provide specialised service and products.”

According to Lawrence, COBA research said that 84 per cent of Australians look for banks “with a purpose beyond profit”.

“Customer-owned banks are essential to Australian banking, providing customers with competitive alternatives and ensuring they have options when it comes to service and products,” Lawrence said.

The CEO said that customer-owned banks were “centred on helping customers and the communities they serve”.

“Time and time again, they have proven that a customer-first focus delivers better outcomes for customers and communities,” he said.

[Related: Why customer-owned banks are leading the B Corp movement in banking]