After several months of tougher lending conditions for Australian businesses and a more conservative approach from Australian banks in the post-royal commission environment, lenders are starting to regain lost ground in the popularity stakes.
Market researcher Roy Morgan has revealed that satisfaction with the big four reached 75.9 per cent, up by 0.6 of a percentage point since February, although still below total bank satisfaction of 78.5 per cent.
Roy Morgan’s Customer Satisfaction Report on Consumer Banking in Australia and Financial Institutions Advocacy Report found that banks outside of the big four currently have a satisfaction rating of 83.8 per cent, well ahead of the big four.
The major institutions took a hit during the banking royal commission of 3.3 per cent from prior to the commission, compared to 1.1 per cent for the banks outside of the big four.
Commonwealth Bank of Australia has the highest satisfaction of the large banks, at 78.1 per cent, followed by Westpac at 74.7 per cent, ANZ at 74.4 per cent and NAB at 72.7 per cent.
Among the smaller banks, Bendigo Bank has the highest rating at 90.1 per cent, followed by ING at 89.9 per cent.
The loyalty factor
Roy Morgan also tracked Net Promoter Scores (NPS), a metric for customer loyalty among consumers who consider banks to be their “main financial institution” (MFI customers).
The big four banks’ NPS have begun to recover from the commission, the report noted, rising to 0.4 in April, up from -1.6 in February. Prior to the royal commission, the big four had a collective NPS of 2.8.
The banks outside the big four saw an NPS of 24 in April, higher than it was before the royal commission when it was 23.4.
The NPS for the big four declined through the royal commission to November last year, but the smaller banks maintained a generally positive trend during the period, the researcher said.
“A major challenge remaining for the big four banks is to reduce the increasing lead that the smaller banks have in satisfaction and NPS,” said Norman Morris, industry communications director, Roy Morgan.
“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.”