Mutual bank mystery: Why do happy customers take money elsewhere?

by AB15 Oct 2013

More than half of all mutual banking sector customers’ dollars are held at other institutions, despite the fact that these lenders – which include building societies, credit unions and mutual banks – have consistently higher customer satisfaction rates than the big four.

According to the Roy Morgan Consumer Single Source Survey, in the six months to August, 2013, 89.2% of total mutual sector customers were satisfied with their institutions. This is compared to CBA’s 81.1%, followed by NAB (79.1%), Westpac (78.7%) and ANZ (78%).

Over the past few years, financial institutions have consistently increased their level of satisfaction among their customers, however, the big four have been more successful than their mutual competitors at capturing their customers money.

As it currently stands, CBA holds 59% of their customers’ dollars, with 41% held at other institutions. ANZ and NAB rank equal second, both capturing 53% of their customers’ dollars, followed by Westpac at 50%. The Total Mutual Sector captures less than half (44%) of all dollars held by their customers.

Steve Laue, general manager, financial services at Roy Morgan Research, says a good customer satisfaction score can help increase customer share, retention, loyalty and advocacy – but it doesn’t always translate into capturing clients’ money.

 “Customers are ever-increasingly looking for institutions that can provide banking services as per their needs and requirements. With a wide range of choices available for consumers in today’s market, financial institutions need to understand and profile their customers to better meet their individual banking needs,” says Laue.

“The Mutual Sector has a big advantage in terms of customer satisfaction over the big four banks. The challenge for them is to try and capitalise on this advantage in order to gain an increased share of dollars from its customers. It will be interesting to see how the Mutual Sector tries to increase their customers’ real loyalty as measured by share of wallet.”


  • by David 15/10/2013 10:28:01 AM

    Why do 'experts need to complicate the world? The simple wizdom of not putting all one eggs in one basket is a strong driver here. Mutuals are more often regarded as solid thrift organisations, so they get the 'rainy day' money. It is a quantum leap from that status to being a serious full service provider.

  • by Judy West 15/10/2013 10:31:18 AM

    Mutuals have never fully recovered from the run on their funds in the seventies. Customers absolutely LOVE the staff and really engage with them, but the nagging doubt remains that they may not be quite safe.

  • by Justin 16/10/2013 8:28:07 AM

    Judy West take your head out of the sand - mutuals are ADI's and thus subject to the financial claims scheme whereby deposits for individuals are protected up to $250k. Also regulated by APRA just like the big banks.