Customers loyal but still unsure about banks
The recent parliamentary discussions around initiatives to make it simple for customers to switch between banks has opened the question of just how loyal the average customer is to their services provider, according to DBM Consultants.
Data collected between July 2015 and September 2016 by DBM Consultants revealed that National Australia Bank (NAB) is currently ranked ahead of competitors as the most likely for customers to recommend its services. Despite its position as the market leader, however, the bank has recorded a slight but steady drop in customer loyalty levels since the beginning of the data collection last year.
The Commonwealth Bank (CBA) recorded the largest drop over the 12-month period, but remains in second place for recommendation levels. Westpac is close to on par, dropping from a high in March this year and showing the most volatility in customer satisfaction levels. ANZ recorded the lowest level of customer satisfaction to September, despite rising slightly in August.
DBM group account director, Liliane Foederer, said: "Customer loyalty is a valuable asset for any business, especially banks. Loyal customers are generally worth more because they are valuable — they stay with the bank longer, do more business [and] spread the good word."
"Banks operate in a highly competitive world and most are keen to find out how loyal their customers are to them and how they compare against their peers."
With competition high, Foederer said that banks should continue to maintain reputation and gain customer loyalty through consistently high levels of customer service, responding quickly to inquiries, striking an effective balance between traditional and innovative channels and increasing the ease of day-to-day banking.
Foederer said the most important message to take from the statistics was that satisfaction levels remain reasonably positive, meaning that the majority of Australians are in fact remaining loyal to their main bank.
"High levels of advocacy are difficult to achieve and maintain over time... it is quite complex and becoming increasingly competitive," she said.
"Many of these customers also deal with at least one other bank, they are in a good position to make an informed judgement about how their main bank compares."
AUTHOR
Hope William-Smith
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
