Bank satisfaction survey
Local banks again came out on top in our latest bank satisfaction survey. See how your bank rates and find out which have the most satisfied customers.
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What we found
Locally-owned TSB had the happiest customers: 87% were very satisfied with the bank’s service. The Co-operative Bank (82%) and Kiwibank (71%) were next best dressed.
At the other end of the scale were Aussie-owned banking giants ANZ and ASB. Just 52% of their customers were very satisfied, compared with the industry average of 60%. Both banks rated below average for value for money and their customers were more likely to be thinking about switching.
Upselling practices
ANZ and ASB stood out for another reason – their upselling practices. Their customers were significantly more likely to report the banks trying their luck offering financial products – from credit cards to life insurance – without the customer requesting the product.
About a third of ANZ (32%) and ASB (34%) customers said they’d been offered unsolicited products by the banks.
ANZ and ASB were the most likely to upsell but they were far from alone. Overall, 27% of customers reported getting offers from their bank for products ranging from insurance to mortgage top-ups. The most common offers were credit cards, increases in card limits and life insurance.
While you might expect this type of behaviour at your local appliance store, it’s more concerning when a bank tries it on. By law, lenders are required to ensure credit is suitable for borrowers and meets their needs. Our survey found less than half of the customers who got these offers thought the product was a good option.
Of those offered a new credit card or an increase in their card limit, only about one in three thought it suited their needs.
If the idea of your bank spruiking these types of products leaves a bad taste, Kiwibank was the least likely of the banks in our survey to try it on.
Complaints
About one in eight customers reported experiencing a problem with their bank in the past year. Poor customer service was the biggest problem: 49% of complainants reported it as an issue. Incorrect charges (29%) and processing errors (21%) were next. A significant proportion (44%) thought their complaint had been handled poorly. Just 22% thought their bank had dealt with it very well.
If you’re not happy with how your complaint has been treated, you can take your case to the free and independent Banking Ombudsman scheme.
Last year, the scheme handled 2741 inquiries and complaints. Most concerned the big four Aussie banks, although their overall share (69%) was less than their share of the market (89%). Kiwibank ranked fifth: while it has 4% market share, it attracted 17% of inquiries and complaints.
Switching banks
If you’re unhappy with your bank – for any reason – don’t put up with it. Switching is an option. Current rates of switching are low – only 5% had switched in the past year – reducing the incentive for banks to up their service.
Our survey results may have spurred you into looking for a new bank. Here’s our step-by-step guide to making the switch.
Your first port of call? Your bank: Check what types of accounts you hold, fees you’re being charged and the interest you’re earning. If nothing else, it’s a good starting point to compare other banks. Ask your bank if it can offer anything to sweeten the deal.
Shop around: It’s classic Consumer NZ advice for a reason – it works! Check out the banks’ websites to see how they measure up. Remember, you don’t have to stick with one bank for all your banking.
Set up new accounts: When you’ve made your choice, set up accounts at your new bank before you say goodbye to the old one. You want to know your new accounts are up and running prior to closing your existing accounts.
Flicking the switch: You can handle this yourself but all major banks have switching teams to help facilitate your move. To use the bank’s service, fill in a “Switching Bank Request” form (you’ll need your old banking details and dates for cancelling payments). Your new bank will manage the payment switching process, including reloading your existing payment authorities to your new account.
Bank ratings
Overall satisfaction: 87%
Above average satisfaction for: fees, timely responses to inquiries, advice on products and services, value for money
Below average satisfaction for: -
Annual profit before tax: $64.5m
Market share: 1.3%
TSB says its customers are “at the heart of everything we do” and, from what we’ve found, customers reckon it’s doing a good job. In our past two surveys, it took top spot, and this year was no different. It also scored above average on four of our five core performance measures.
Overall satisfaction: 82%
Above average satisfaction for: fees, responsible lending, value for money
Below average satisfaction for: -
Annual profit before tax: $16.5m
Market share: 0.5%
The Co-operative Bank, the minnow in our survey, took second place for customer satisfaction this year, repeating its 2017 placing. As with other local banks, it earned above-average ratings for fees and value for money. It also rated above the industry average for responsible lending.
Overall satisfaction: 71%
Above average satisfaction for: fees, value for money
Below average satisfaction for: -
Annual profit before tax: $71m
Market share: 4.0%
Kiwibank – our bronze medal winner – was the least likely to try to upsell financial products. If you’re a fan of banking on the go, its smartphone app was a winner with eight out of 10 customers.
Overall satisfaction: 65%
Above average satisfaction for: -
Below average satisfaction for: fees
Annual profit before tax: $1,300m
Market share: 18.7%
BNZ retained its spot in the middle of the pack. It scored below average for fees, with just one in five customers rating it highly on this measure. Our survey took place before BNZ’s announcement last month that it was cutting a range of service fees.
Overall satisfaction: 55%
Above average satisfaction for: -
Below average satisfaction for: fees, timely responses to inquiries
Annual profit before tax: $1,483m
Market share: 19.6%
After two years at the bottom of our ratings, Westpac has climbed the ladder with a satisfaction rating of 55 percent. But it remains below average for fees, with a third of customers dissatisfied on this measure, and for timely responses to inquiries.
Overall satisfaction: 52%
Above average satisfaction for: -
Below average satisfaction for: responsible lending, advice on products and services, value for money
Annual profit before tax: $2,465m
Market share: 32.5%
With nearly a third of the market, you’d think ANZ had a secret recipe for happy customers. But it came last-equal in our survey and scored below average on three of our five core performance measures.
Overall satisfaction: 52%
Above average satisfaction for: -
Below average satisfaction for: value for money
Annual profit before tax: $1,483m
Market share: 18.1%
This year sees ASB slide all the way to equal last. It rated below average for value for money and one in 10 ASB customers were also dissatisfied with its performance as a responsible lender.
GUIDE OUR DATA are from a nationally representative survey of 1544 New Zealanders, aged 18 years and older, carried out online in February 2018. Satisfaction ratings show the proportion of respondents who scored their bank 8, 9 or 10 on a scale from 0 (very dissatisfied) to 10 (very satisfied). Ratings are shown for five key measures (advice on products and services, fees, responsible lending, timely responses to inquiries and value for money) and overall satisfaction. Banks’ market share is from the Banking Ombudsman and is classified according to total assets at 31 December 2016. Annual profit before tax is from each bank’s latest annual report.
TSB, The Co-operative Bank and Kiwibank win People's Choice
Consumer NZ has given TSB, The Co-operative Bank and Kiwibank 2018 People’s Choice awards for banking. A brand must be a standout performer for customer satisfaction to receive a People’s Choice award.
Bank stats
69% agreed the profit banks are making shows they are charging too much.
33% agreed banks have their customers’ best interests at heart.
31% agreed banks charge customers fairly – competition keeps their charges competitive.
Banks' income
Banks’ total income for 2017: $13b
Comprised of 2017 total net interest income ($9.9b) + total other income ($3.1b)
Banks’ increase in income since 2014: 7.8%
Wake-up call for NZ banks
A damning inquiry into the Australian banking industry has put the spotlight on practices here and New Zealand banks have been asked to prove they’re playing fair.
We welcome scrutiny of the local market. While banks have legal obligations to act as responsible lenders, our research has found cause for concern about whether customers are being sold products they don’t need.
Our recent banking survey found 27% of customers reported unsolicited offers from their bank for products ranging from new credit cards to mortgage top-ups. However, fewer than half the customers who got these offers thought the product was a good option for them.
Banks were given until May 18 to provide information on their practices to the Financial Markets Authority. The authority is assessing responses.
About the Oz inquiry
More than 5000 people have made submissions to the Australian inquiry. It’s already resulted in high-level resignations at AMP, after evidence emerged it was charging customers for advice it never gave. Commonwealth Bank has also admitted withdrawing advice fees from dead people’s accounts.
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