Financial markets may have been disappointed by National Australia Bank’s recent 22% drop in personal banking cash earnings, but for customers, a new emphasis on fairer banking appears to be yielding results. A survey by Roy Morgan Research, based on a nationally representative sample of more than 50,000 consumers, found that in the 12 months to April 2010, the bank’s customer satisfaction level rose by 4.1%. Only Bankwest had a bigger improvement, with 5.7%.
NAB claims to have had a 42% reduction in customer complaints and a fivefold increase in new transaction accounts since making improvements last year. In April, NAB won an inaugural CHOICE Award for its Classic Banking transaction account, which has comparatively low fees. And following a sustained campaign by CHOICE and the NSW Consumer Action Law Centre, as well as a backlash from its own customers, NAB went further than all its competitors by abolishing the penalties for events such as direct debit dishonours and overdrawn accounts. Its Chief Executive, Cameron Clyne, has since labelled the fees “unsustainable and consumer-unfriendly”.
However, according to the Roy Morgan report, NAB still has significant ground to make up. Its customer satisfaction level is 71%, the lowest of the four major banks and far below ING (86.6%), Bendigo Bank (84.1%), building societies (88.2%) and credit unions (86.3%). And like many of its competitors, NAB faces the uncertainty of a potential class action run by law firm Maurice Blackburn, following years of excessive and potentially unlawful penalties that yielded billions for Australian financial institutions.