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.”