It didn’t take long after the horror stories from the banking Royal Commission before customer satisfaction and loyalty fell.
Already 2.1 million Aussies are looking to switch banks and two thirds (67 per cent) of these are big four bank customers, according to the latest figures released by Nielsen research.
Not only that, but 16 per cent of this 67 per cent are becoming more and more interested in digital banks or ‘neobanks’ such as ING, ME Bank or UBank, representing a 5 per cent jump from June 2017 to June 2018.
New open banking legislation, officially kicking in 1 February 2020, would give customers more choice in the marketplace and lead to switching, said Nielsen head of financial services and insurance Jo Brockhurst
Open banking refers to new banking infrastructure where you have the authority to instruct your banking institution to give your data to another institution, with the aim of uncovering the best deals on products and services.
Consumers’ increasingly mobile banking habits, and their rising dissatisfaction with the big four banks have given rise to neobanks that focus on delivering on frictionless, personalised experiences for customers or shorten process times for services such as home loan approvals.
“Digital banks and neobanks offer an attractive solution, coinciding with a cultural shift
to customers driving the agenda of how they want to bank and the recent Royal
Commission,” Brockhurst said.
The majority of digital bank customers (90 per cent) say they are very or quite satisfied, with 75 per cent saying they would recommend their bank to others. Big bank customers are less evangelistic, with less than half (45 per cent) willing to recommend their bank.
“The trend towards digital banks is paving the way for neobanks to gain market share,” she said.
“While early adopters of neobanks have traditionally been millennials (age 18 to 35), their customer base has rapidly expanded from 18 to 80-year-olds for some brands in Australia.”
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