Monday 18th February 2019
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The scandals exposed by Australia’s royal commission into financial services don’t appear to have dented New Zealanders’ trust in banks.
In fact, consumer banking satisfaction went up for three of the big four Australian-owned banks in the latest Roy Morgan Single Source (NZ) survey. And the overall satisfaction with banks rose to 79.1 percent from 78.2 percent a year ago.
ANZ was the only major bank to see its customer satisfaction rating fall - down 1.9 percent to 77.1 percent.
Still, the most trusted banks in New Zealand remain the smaller banks, with the exception of SBS Bank (formerly the Southland Building Society), which is the least trusted bank in the survey. But even SBS, which registered as a bank in 2008, saw its approval rating rise five percentage points to 75.1 percent.
“While the finance royal commission in Australia has had a negative impact on bank customer satisfaction in Australia, particularly for the big four, it appears that this has not generally been felt by the Australian banks operating in New Zealand,” says Norman Morris, industry communications director at Roy Morgan.
“Satisfaction with New Zealand banks is generally positive and improving, as evidenced by the fact that over the last year, eight of the nine largest banks showed increased satisfaction,” Morris says.
However, he notes the wide disparity between the highest and lowest performers, and that ASB, ANZ and Westpac are all below the average.
TSB bank was the top rated bank this year, overtaking Kiwibank with a 6.1 percentage point gain to 88.5 percent, while Kiwibank’s rating grew just 0.7 points to 84.6 percent.
The Co-operative Bank came in third with its rating rising 3.9 percentage points to 81.7 percent.
Bank of New Zealand, which is owned by National Australia Bank, was the most highly rated of the big four, its satisfaction rating growing 0.8 percentage points to 80.4 percent.
Westpac was the least rated of the four, although its satisfaction score still rose 2.1 percentage points to 76.5 percent.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has caught Australian financial institutions involved in practices like charging fees to dead people, charging fees when no service was delivered, and lying to regulators.
Yet astonishingly, even now the Australian banks haven't seen their reputations too tarnished.
For example, the Commonwealth Bank of Australia, which owns ASB Bank, saw its satisfaction rating fall just three percentage points to 77.1 percent. That still leaves it just one percentage point below the ASB’s rating in New Zealand.
National Australia Bank, whose managing director Andrew Thorburn and chair Ken Henry both resigned in the wake of the royal commission’s final report, has a 75 percent satisfaction rating, down 4.1 percentage points, although that’s a good 5.4 percentage points lower than its New Zealand arm’s rating.
ANZ’s Australian rating is 74.2 percent, nearly three percentage points lower than in New Zealand.
And Westpac’s Australian rating was the lowest at 72 percent, while its New Zealand rating was 75.1 percent.
Despite the political conditions that led to the royal commission, which began in late 2017, Roy Morgan finds that dissatisfaction with banks in Australia is actually considerably lower than it was a couple of decades ago. In 2001, customer dissatisfaction with banks was 18.2 percent, whereas it was just 5.6 percent in December 2018. And that latter figure is only slightly higher than the 4.9 percent it scored before the royal commission started.
The Roy Morgan NZ results come despite damning findings by New Zealand’s Reserve Bank and Financial Markets Authority, published in early November. The regulators found there are significant weaknesses at our banks in terms of governance and the management of conduct risks.
The two regulators also criticised the banks for lacking proactivity in identifying and remediating conduct issues and risks. However they said that apart from a small number of specific issues, they don’t think widespread misconduct or poor culture issues exist across New Zealand banks.
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