National ANZ Fail To Impress; BNZ Big Improver

Monday, 13 October 2003, 11:23 am
Press Release: Auckland University Business School

National And ANZ Fail To Impress; BNZ The Big Improver

Residential and business customers are on the whole less satisfied with their banks than they were a year ago, according to the latest University of Auckland Business School annual survey of bank customer satisfaction. For residential customers, the National Bank and ANZ have suffered the biggest decreases in customer satisfaction levels from last year, while the BNZ is the biggest improver. Among the major banks, ASB continues to lead the pack in both residential and business satisfaction ratings, although smaller player TSB Bank remains a clear frontrunner in the residential market.

Acceptance of Kiwibank continues to grow, although newcomer SuperBank is finding it difficult to establish itself.

The sixth version of this annual survey was undertaken by University of Auckland Business School Marketing Lecturer Andrew Parsons in conjunction with former Business School colleagues Bodo Lang and Mark Colgate. The nationwide survey canvassed 1,175 residential customers and 1,150 business customers about their satisfaction and loyalty towards their banks, what they liked and disliked about their banks, and what they thought of Kiwibank and Internet banking - among other questions.

The survey's mid-September timeframe means it captures all recent activity in the New Zealand banking industry, including current speculation surrounding the sale of National Bank.

Of the five major banks in New Zealand, ASB performs the best in customers' eyes - both residential and business customers (see attached graphs). "In this respect we consider them #1 in terms of delivering the best banking experience - compared to the other major banks in NZ," says Mr Parsons.

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Residential banking National Bank has suffered a fall from grace with its customer satisfaction slipping eight percentage points in the residential market. Last year 78% of its customers were either very satisfied or satisfied; this year this figure has dropped to 70%. Dissatisfaction rose from 6% to 11%. More interestingly, 18% of National Bank customers are currently considering switching banks, up from 10% from last year. "We believe this is a temporary effect as customers show their discontent with the idea of a possible merger," says Mr Parsons.

ANZ has also suffered a large fall in its satisfaction rating, down to 52% from 59%, placing it firmly in last place in the residential market. Incredibly 27% of ANZ customers are thinking of jumping ship, compared to 23% last year.

BNZ was the star performer in terms of improvement from last year. In the residential market in particular it posted quite dramatic gains in popularity. In fact the rise has been so dramatic it is now second place - equal with National Bank. This is a far cry from its last place in 1998.

Outside of the five major banks, TSB is still proving a worthy competitor with very strong support from its customers. Ninety-five per cent of its customers are either very satisfied or satisfied, a result that is far ahead of any of the five major banks in New Zealand. However, even TSB was unable to buck the trend of declining customer satisfaction in the residential New Zealand banking market as its satisfaction score last year was 97%.

The future of Kiwibank looks positive; support for the bank increased from 43% to 58% and of those customers currently thinking of switching banks (currently 20% of all bank customers), 34% are thinking of switching to Kiwibank. This is up from 31% last year.

Things look somewhat different for the most recent entrant into retail banking in New Zealand, the supermarket-based SuperBank. Few New Zealanders are considering switching to this bank (3%) and only 23% of all bank customers support the concept, compared with Kiwibank's 58% support.

Mr Parsons says three main factors are likely to be causing this: * SuperBank cannot claim the same New Zealand heritage as Kiwibank; * SuperBank is likely to have a more niche appeal due to its unique distribution/branch network; * SuperBank has not been established as long as other banks in New Zealand, hence some consumers may be cautious in moving their money to this bank.

Business banking Business results are much more stable compared to last year. This is often the case as businesses are typically more calculative in terms of evaluating their relationships with their banks, while consumers tend to be more emotional. The only exception to this is Westpac which suffered a major drop in its satisfaction ratings (see results below), dropping to 58% satisfaction from 71% in 2002. This means Westpac is now tied for last place with ANZ. BNZ forms its own middle group and National Bank and ASB still create a cohesive top group.

Overall the results show that ANZ delivers a much less valuable customer experience than National Bank.

What customers liked best and hated the most about their banks Not surprisingly customers are most unhappy about the fees and charges banks charge them - this was the lowest rated factor. Only around 30% of business and residential customers think that the services they receive from their banks are worth the money they pay for them.

Customers, however, were very happy with the friendliness of staff and the willingness of staff to help when asked - around 70% of customers rate staff either good or excellent.

Overall it seems that the human aspect of banking is rated well (e.g. friendliness), but the price side and "willingness to go the extra distance" (e.g. fees, value for money, proactively contacting customers and flexibility) are rated much worse.