Here’s why Australia’s most popular banks are so successful

by Mike Wood04 May 2021

The CEO of the Customer-owned Banking Association (COBA) has spoken of the values of the sector and the importance of having a successful model to ensure customer satisfaction.

Michael Lawrence, CEO of COBA, spoke to Australian Broker after Forbes magazine named a raft of customer-owned banks among their 2021 World’s Best Banks list. While ING Group topped the list, the next four were all customer-owned, making them the most popular banks in Australia.

Newcastle Permanent were the best Aussie-owned bank in the country, followed closely by Greater Bank, Heritage Bank and Beyond Bank.

Forbes spoke to over 40,000 customers across 28 countries and asked them to rate their banks’ performance on key metrics such as customer satisfaction, financial advice, digital services, fees and trust.

“It goes to the heart of the model, the structure and why we exist,” said Lawrence. “We exist for our customers. They are not beholden to shareholders and therefore the entire focus is on doing the right thing by the customer, and they do that by continuing to invest in service, in product and in innovation. They’re not paying away large dividends, so I think that they are closer to their customers and rank very highly as a result of that.”

That customer-owned banks tend to be more local and more in touch with their community on a regular basis is seen as a strength, said Lawrence.

“There is a closeness to the community,” he said. “They might be regionally based from a headquarters perspective, but they’re quite national in terms of what they do. Others are more localised, but regardless of where they operate from, they are very close to their communities.”

“It goes to the DNA of the customer-owned bank: it’s about the customer and the community. We consistently see higher trust and approval scores, whether it is Roy Morgan, Forbes or NPS, the scores are consistently above in terms of trust, service, product and across all the key metrics. “