Local banks have the edge when it comes to customer satisfaction.
Want a bank that delivers better customer service? Our annual survey shows you’re more likely to get it at a Kiwi-owned bank.
Eleven percent of consumers reported experiencing a problem with their bank in the past year.
As in previous years, poor customer service was the biggest problem: 37% of complainants reported it as an issue. Incorrect charges (25%), internet banking issues (18%) and processing errors (18%) were next.
A significant proportion (48%) thought their problem had been handled poorly. Just one in four thought their bank had dealt with it very well.
Over the past few years, banks’ selling practices have been in the spotlight and the industry has copped criticism for selling poor value products to customers.
To help gauge industry behaviour, our survey asked consumers about whether they got unsolicited offers from their bank for products such as life insurance and credit cards.
Twenty-one percent of consumers said their bank had offered them a financial product they didn’t request in the past year. That’s on par with our 2019 survey. The most commonly offered products were still credit cards, life insurance and personal loans.
The majority of consumers who got these offers didn’t think the product was a good option for them or suited their needs. Just 27% of those offered life insurance by their bank thought it was a good option for them.
Concerningly, one in eight said they’d felt pressured by their bank into buying a product they didn’t need. ASB customers were more likely to say they’d felt pressured (18%).
Just 48% of consumers think banks can be trusted. Only 38% agree banks have their customers’ best interests at heart.
Similar to our 2019 survey:
Law changes to try to improve banks’ behaviour and make sure they treat customers fairly are in the pipeline.
Banks already have legal obligations to act as responsible lenders. However, these requirements haven’t been enough to adequately protect consumers.
A bill before parliament will require banks (as well as insurers) to be licensed by the Financial Markets Authority (FMA). They’ll also have to put in place a “fair conduct programme”, setting out how they intend to implement their obligations.
Details of exactly what banks will have to include in these programmes and what they’ll be required to report on are yet to come. This detail will be part of regulations to be developed when the bill is passed (its progress has been delayed due to the Covid-19 lockdown).
Critical to the success of any law changes will be the resources available to the FMA to monitor banks’ conduct and make sure they’re following the new rules.
In the current economic climate, that’s more important than ever. Consumers also want to know their interests are being protected. Our survey found 73% think banks need to be monitored more closely.