While the Finance Royal Commission in Australia has had a negative impact on bank customer satisfaction in Australia, particularly the big four, it appears that this has not generally been felt by the Australian banks operating in New Zealand. Michele Levine from Roy Morgan will tell us that customer satisfaction there is increasing.
Transcripts:
Kevin:   While the Finance Royal Commission in Australia has had a negative impact on bank customer satisfaction in Australia, particularly the big four, it appears that this has not generally been felt by the Australian banks operating in New Zealand. Customer satisfaction with banks in New Zealand in the 12 months to December was 79.1%, according to some research from Roy Morgan. Joining me to talk about that, Michele Levine.
Kevin:   Michele, thank you very much for your time.
Michele:   My pleasure.
Kevin:   Interesting, isn’t it, that the same banks in Australia operating in New Zealand seem to be generating some customer satisfaction. Do they operate differently, Michele?
Michele:   Well, I think they do operate a little bit differently, and whether the whole thing about the royal inquiry has made such an impact in New Zealand as Australia, I’m not sure.
Michele:   I think we have to realise, though, in Australia, although customer satisfaction took a bit of a dip with the royal inquiry, and net promoter score, that’s the proportion of people that in fact would recommend a bank, took a bit of a dip, it really didn’t fall in a hole. What’s been amazing is the degree to which customers have continued to bank with the banks and have continued to be satisfied. But what our research in Australia is showing is that distrust has skyrocketed.
Michele:   So, we still, in Australia, are sort of satisfied with the banks’ performance specifically, as customers, we trust the banking system as such, but we are very angry, frustrated, disappointed and distrusting now of the major banks. So, in New Zealand, I’m actually not terribly surprised to see no real drop in satisfaction or in the willingness to recommend these banks.
Kevin:   Okay, well let’s find out a little bit more about that, because there are some banks that are purely New Zealand banks, like TSB. There are a couple of others-
Michele:   The Kiwibank and the Co-op.
Kevin:   Kiwibank, yeah.
Michele:   Yes.
Kevin:   There are things, too, like KiwiSaver, which has generated a lot of really goodwill about what not so much the banks are doing but what the government are doing through the banks in helping people save money.
Michele:   Yes, I think we’re going to see a lot more of this, what we might call socially responsible financial activity and discussion, and I think people will respond really positively to that.
Michele:   But it is interesting, whenever we survey people in New Zealand and ask them about their satisfaction with banks or retailers or really anything, New Zealanders really love New Zealand products. They really love their own bank, their own retailer, and it’s not surprising, but I think it’s terrific to see.
Kevin:   It is indeed. Let’s have a look at some of the results that came out of the survey, ’cause I think TSB Bank rated highest in terms of customer satisfaction. Is that correct?
Michele:   Yes, it sure does. In terms of customer satisfaction, TSB Bank have 88.5% of their customers are satisfied, so that’s extraordinary. That’s fantastic. And that’s followed by Kiwibank, and they’ve got 84.6, so just on 85% of their customers’ satisfied. And then The Co-operative Bank, 81.7%. So these three New Zealand banks are really doing extremely well.
Michele:   But you have to say even BNZ, 80%, Rabobank, 79.5, ASB, 78.1, and then ANZ’s only a little behind that at 77.1, Westpac just below at 76.5. So, people are actually pretty satisfied with their banks.
Kevin:   Has this shown an improvement year on year, Michele?
Michele:   There’s a little improvement overall year on year in New Zealand, about .7%. But I think what we’re actually seeing in the broader picture, it’s like in the ’80s, we loved our banks and our bank managers, and then we sort of lost touch with our bank managers as people and satisfaction with banks in both Australia and New Zealand crumbled a little bit. And then what we’ve seen is we’ve seen the digital take-up, wonderful online banking systems and apps that actually make it really easy to bank, and people who are using those are much more satisfied than those who aren’t.
Michele:   So we’re seeing some really interesting, I think, service level improvement in satisfaction across both Australia and New Zealand.
Kevin:   I think if you look at the top banks, those above the ANZ in New Zealand, they all, ASB, Rabobank, BNZ, Co-operative Bank, Kiwibank, and TSB Bank all improved their rankings year on year. ANZ was the first one to take a bit of a nose-dive.
Michele:   That’s right, yes, they’ve all improved by a little bit. Rabobank up by just over 4%, Co-op Bank just under 4%, and the TSB Bank at plus 6%, so that’s a really good improvement.
Kevin:   Yes it is. It’s going to be interesting to watch, Michele. It’s a great insight as to how people are really feeling about the banks and what’s going to happen. We’re seeing a number of, I guess, non-traditional lenders emerging in the Australian market, and one wonders if the same will happen in New Zealand. Probably less likely I would think.
Michele:   I think it will happen in New Zealand. I can’t see why it wouldn’t. The only reason you might say the New Zealand market’s a bit small, but these non-traditional lenders are not necessarily wanting to employ a lot of people or need really big dollars. A lot of them are digital. So I would expect to be seeing changes in New Zealand as well.
Michele:   But every industry is being disrupted. There’s no question, and I think what’s really important in banking or any industry is understanding your customers. The fact that the banks are really focused on satisfying their customers is a very good sign. It means that they’ll keep in touch with customer needs and try and make sure their products and services and the way that they inform their customers about their options, I think all of those good things will stand them in good stead against alternatives.
Kevin:   Very good. Wonderful insight.
Kevin:   Michele, thank you for sharing your knowledge with us too, and thank you to Roy Morgan for making that research available to us.
Kevin:   My guest has been Michele Levine from Roy Morgan Research.
Kevin:   Thanks, Michele.
Michele:   Wonderful. Thank you.