Mortgage Customer Satisfaction – Go Small!

The latest data shows that customers of the smaller mortgage lenders are significantly more likely to be satisfied than those using the big four.  And overall the smaller players are hitting the high note in terms of service compared with their larger competitors, with mortgages leading the way.

According to Roy Morgan Research, customer satisfaction with Bendigo Bank in August 2017 was 89.3%, making it the top performer among the ten largest consumer banks. Not only was Bendigo the satisfaction leader but it improved it’s rating over the month by 0.9% points, against an overall decline of 0.2% points for banks in total.

Smaller banks lead in customer satisfaction

Not only does Bendigo Bank lead in customer satisfaction among the major ten banks with 89.3% but it was followed by other small banks such as ING Direct with 86.7%, Bank of Queensland (84.2%), Suncorp (83.0%) and St George (82.0%). The best performer among the four majors was the CBA with 80.2%, followed by Westpac on 78.5%, NAB (78.4%) and ANZ (77.3%). The overall average satisfaction for all banks was 80.8% in August.

Consumer Banking Satisfaction August 2017 - 10 Largest Consumer Banks1 
1. Based on customer numbers 2. Include banks not shown Source: Roy Morgan Single Source (Australia). 6 months ended July 2017, n= 26,184; 6 months ended August 2017, n= 26,119. Base: Australians 14+
 

Over the last month the major banks to show improved satisfaction were Bendigo Bank (up 0.9% points), Bank of Queensland (up 0.7% points), Suncorp (up 0.5% points), Westpac (up 0.4% points) and NAB (up 0.1% point). The biggest drop in satisfaction was by ING Direct (down 1.2% points) but they remained in clear second place overall.

Low satisfaction among mortgage customers of the big four banks reduce their overall satisfaction

The mortgage customers of each of the big four banks continue to be a drag on their overall satisfaction, despite historically low home-loan rates. Over the last month, satisfaction among the big four’s home-loan customers has fallen marginally further behind their other customers with a decline of 0.4% points to 75.7%, compared to a drop of only 0.1% points for non home-loan customers (to 79.8%).

Satisfaction of Mortgage and Non-Mortgage Customers August 2017 - 10 Largest Consumer Banks1
1. Based on customer numbers Source: Roy Morgan Single Source (Australia). 6 months ended July 2017, n= 26,184; 6 months ended August 2017, n= 26,119. Base: Australians 14+

Bendigo Bank has the highest home-loan customer satisfaction (of the top 10) with 96.3%, followed by Bank of Queensland with 93.6%. These two remain well ahead of their major competitors, with the next best being ING Direct (86.8%). The CBA has the highest home-loan customer satisfaction of the big four with 77.4% (down 0.7% points over the last month), followed by NAB on 75.4% (up 1.6% points).

Mortgage Customer Satisfaction A Drag

Data from Roy Morgan shows mortgage related satisfaction has fallen, whilst banking using an app on a mobile phone or tablet is now more popular than using branches, with 38.8% of Australians using it in an average four-week period, compared with only 28.2% for branches. Satisfaction is a major driver of this trend with 90.7% satisfaction with mobile banking among the big four, compared to 84.8% satisfaction with branches.

CBA leads in satisfaction with mobile banking

With a 93.8% satisfaction rate among its mobile banking customers, the CBA has the highest satisfaction of the 10 major banks and has improved by 2.2% points over the last 12 months. Bendigo Bank is a close second with 93.4%, followed by ING Direct on 92.7%. The remainder of the big four banks were well below this top group with ANZ on 88.4%, NAB on 88.0% and Westpac on 87.7%.

Satisfaction1 with mobile banking2 vs branch banking – 10 Largest Consumer Banks3

mobile-vs-branch-banking-sat-chart

1. Based on used in the last 4 weeks 2. Using an App on a mobile phone or tablet 3. Based on customer numbers. Source: Roy Morgan Research Single Source (Australia). 6 months ended November 2015, n= 25,410; 6 months ended November 2016, n=24,727
 

Satisfaction with branch banking is highest for Bendigo Bank (94%), followed by Bankwest on 90.8% and St George (89.5%). The lowest were Westpac (82.8%) and NAB (85.0%). CBA branch satisfaction is at 85.7%, a long way behind that of its mobile users (93.8%) a gap that has widened over the last 12 months.

Mortgage customers of the big four remain a drag on satisfaction

The mortgage customers of each of the big four banks continue to be a drag on their overall satisfaction, despite historically low home-loan rates. Over the last 12 months, satisfaction among the big four’s home-loan customers has fallen further behind their other customers with a decline by 2.8% points to 75.4%, compared to a drop of only 0.4% points for non-home-loan customers (to 80.5%).

Satisfaction of Mortgage and Non-Mortgage Customers – 10 Largest Consumer Banks1

mortgage-vs-non-mortgage-sat-chart

1. Based on customer numbers. Source: Roy Morgan Research Single Source (Australia. 6 months ended November 2015, n= 25,410; 6 months ended November 2016, n=24,727)
 

ING Direct has the highest home-loan customer satisfaction (of the top 10) with 94.8%, followed closely by 94.5% for Bendigo Bank. These two remain well clear of the field, with the next best being St George (83.6%) and Bankwest (83.3%). The CBA has the highest home-loan customer satisfaction of the big four with 78.0% and Westpac the lowest (72.6%).

The CBA and NAB the big four improvers in November

The CBA was most improved among the big four for the month of November (up 0.3% points to 82.0%), maintaining its top position. The NAB also improved satisfaction marginally (up 0.1% point to 78.8%) but ANZ (down 0.6% points to 77.5%) and Westpac (down 0.1% points to 76.7%) both declined.

Consumer Banking Satisfaction

consumer-banking-sat-chart-trended

Source: Roy Morgan Consumer Banking Satisfaction Report, November 2016, average6-month sample n=25,015.
 

While the big four maintain a close eye on who is the satisfaction leader among them, the mutual banks remain well ahead of all four. The average satisfaction level for the big four in November was 79.5%, compared to the Mutual Bank’s average of 90.1%. The best performers among the mutual banks were Greater Bank (94.5%), Bank Australia (93.9%) and Teachers Mutual Bank (92.3%), all well ahead of the top ranked big four, the CBA on 82.0%

These are the latest findings from Roy Morgan’s Single Source survey of 50,000+ people pa.