Bank satisfaction – how does your bank rate?
The satisfaction level of the big four banks’ personal customers in the six months to December 2016 was 79.9%, up from 79.5% in November, the latest Roy Morgan data reveals. However the top-quintile customers (top 20%), who account for 62.9% of the total value of the financial services market across all banking and wealth-management products, had the lowest satisfaction level of all the quintiles (73.4%) and the lowest level of advocacy with a ‘net promotor score’ (NPS3) of minus 23.9. This NPS score is well below the big four overall average of minus 8.6 and the bottom quintile score of plus 10.
Top-quintile customers negatively impacting satisfaction, growth potential
For each of the big four banks, their highest satisfaction levels are among their lowest-quintile customers (bottom 20%), but as this group accounts for only 0.3% of the total market value and banks already have a high share of wallet (around 70%), they have very little growth potential. The best performer with this segment among the big four was the CBA with 86.7% satisfaction, followed by the ANZ (84.5%).
In contrast to the high satisfaction levels in the bottom quintile, the highest quintile—which represents nearly two thirds (62.9%) of total market value—is least satisfied with the big four. With such a large (and potentially profitable) group being well below the average satisfaction level for each bank, it highlights the need for increased attention if overall satisfaction levels and growth rates are to be improved. The scope for business growth in the top quintile is very significant, as all the major banks are only achieving an average share of around 30% of the potential business (‘share of wallet’) from their customers in this segment.
Once again, the CBA achieved the highest level of satisfaction of the big four, satisfying 75.6% of this quintile, followed by Westpac (74.3%), ANZ (71.3%) and NAB (70.6%).
Tough competition for top-quintile customers
The smaller banks’ satisfaction levels among their high potential value customers (top quintile) are much higher than the big four. The best performer of the 12 largest banks was Teachers Mutual Bank with 96.1% satisfaction, followed by Bendigo Bank (91.6%) and ING Direct (87.8%).
The chart above illustrates how much better the smaller banks are doing in satisfying this segment, the best of the big four being the CBA (75.6%). It is interesting to note the large difference between banks in the same group such as Westpac (74.3%) and St George on (82.9%).
Performing well in satisfaction among this important segment is critical in order to achieve greater ‘share of wallet’ and hence overall growth.
Top-quintile customers are much less likely to be strong advocates
Bank customers in the top quintile have the lowest ‘net promotor score’ (NPS) or advocacy levels and as such show a very similar pattern to that seen with satisfaction. The highest NPS for the big four banks overall is for the bottom quintile with + 10, which is in contrast to the - 23.9 for the top quintile.