02.Everyday banking satisfaction
Building societies and credit unions top the charts for day-to-day personal banking, with both comparing very favourably against the banks. These mutual societies make up about 16% of our survey response for everyday banking (slightly more than that for each of ANZ, NAB and Westpac).
The country’s largest credit union, Credit Union Australia (CUA), and Teachers Credit Union (formerly NSW Teachers Credit Union) have the highest overall everyday banking satisfaction ratings. They’re followed closely by another credit union, MECU. The response for individual building societies was too small to report on, however, collectively they rate very highly.
Why are satisfaction levels higher with smaller institutions than their competitors? As the table below shows, excellent customer service really stands out. Mutual societies also achieved high satisfaction scores for fees, product range and internet banking. Perhaps another factor behind credit unions’ popularity is that they’re community-based and, unlike banks, don’t need to provide a return to shareholders.
A looser form of connection to the community may also help explain the high satisfaction with some of the second-tier banks. Bendigo Bank achieved the highest overall satisfaction score for a bank and, following its 2007 merger with Adelaide Bank, its products and services are available through 1300 outlets covering all states, including 236 community-owned franchises and 190 company-owned branches.
ME Bank (previously known as Members Equity) also has very high satisfaction levels among respondents. ME Bank was originally set up by a trade union, industry superannuation funds and National Mutual (now AXA) and is now fully owned by not-for-profit super funds, with its earnings providing a return on investment for those funds and their members.
Big Four fall short
A number of other second-tier banks achieved good overall scores in the 70s, including HSBC, Bank of Queensland and Suncorp. But as the table indicates, bigger banks’ satisfaction levels fall well short, with ANZ, Westpac, Commonwealth Bank (CBA) and NAB rounding out the bottom. St George, at 69%, has a slightly higher overall satisfaction rating than its new owner, Westpac.
So what explains the Big Four banks’ poor performance? CHOICE members have three major gripes.
- Fees: 36%-38% satisfaction rate.
- Interest rates: 32%-36% satisfaction rate with the interest paid on everyday accounts.
- Customer service: 59%-64%, compared with 85% and 86% for building societies and credit unions.
“The miserable level of interest (0.1%) represents an additional fee,” said one CHOICE member. “It takes hours to contact someone to talk to about your account”, said another. “I have timed CBA at one hour and seven minutes on hold.”
A more satisfied respondent commented that “ME Bank is really, really good. I hardly ever pay any bank fees at all. I just use EFTPOS for withdrawals, or withdraw from the ATMs of banks where they have negotiated fee-free withdrawals.”
Branch and ATM access
As you’d expect, the banks’ huge market presence means they performed better than credit unions for ATM and branch access. It seems consumers must weigh up poor service, fees and interest rates against convenience. “I hold two personal banking accounts, one with ANZ and another with CUA,” said one member. “I have banked with CUA for more than 20 years and have my personal loans with them. I conduct my everyday banking with ANZ because they’re close to my workplace and the convenience of being able to locate their branches when travelling (unlike CUA, whom I’d prefer)”.
New ATM network
A new initiative, released after our survey was conducted, gives the members of most credit unions access to the NAB ATM network without paying foreign ATM fees. NAB joined the rediATM network, enabling its customers and members of participating rediATM institutions to avoid “foreign” ATM fees at a wider range of machines.
Most credit unions and some banks, including AMP Banking, participate in the rediATM scheme, which combined with NAB customers, covers seven million cardholders. The combined ATM network is one of the largest in Australia, with 3100 machines spread across the country.