Consumer NZ: Nearly one in five had a problem with their bank in past year

Wednesday, 16 June 2021

Jon Duffy, Consumer NZ chief executive, says: “The underlying distrust is something they need to take a long-term view on. There’s no one-off quick fix.”

Consumer NZ says nearly one in five New Zealanders had a problem with their bank in the past year, with poor customer service being the most common complaint.

The non-profit consumer advocacy group’s annual banking satisfaction survey showed the proportion of bank customers reporting problems in the past year had risen to 18 per cent from 11 per cent last year.

But it also showed that only one third of people “strongly agreed” that banks could be trusted, and that two-thirds felt bank profits were so high they showed banks were charging too much.

“The industry still has a lot of work to do to lift customer satisfaction, address customer complaints and gain trust,” said Consumer NZ chief executive Jon Duffy.

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The “past year” period covered by the surveying was the 12 months to the end of April, which stretched back to the national Covid lockdown during which banks did a deal with Reserve Bank to allow home loan borrowers, who had seen their incomes fall, reduce or temporarily stop their repayments.

The New Zealand Bankers’ Association chief executive Roger Beaumont said its research showed positive attitudes to banks had increased during the early months of the Covid pandemic.

But, he said: “Frontline bank staff were inundated with calls from customers seeking assistance with lending and cashflow. And there has also been a huge increase in home loan applications in the last year.

“Given all this, it’s perhaps not surprising that some more customers had a less-than-perfect experience, and yet our research shows public attitudes to banking improved overall.”

Duffy said the bank with the lowest overall customer satisfaction score was ASB. Only 58 per cent of its customers who answered the survey said they were satisfied with the service they were getting, though big banks’ satisfaction scores were clustered quite closely together.

Locally-owned TSB was the top bank for customer service for the second year in a row, with 82 per cent of its customers very satisfied with the service they were getting.

The industry average was 64 per cent, Duffy said.

Branch closures have left rural bank customers fuming.

Poor customer service was the most common complaint. ASB and BNZ copped criticism from customers for the way they handled problems.

“Among ASB customers who had experienced a problem in the past 12 months, 45 per cent felt it had been dealt with poorly. The figure for BNZ was 47 per cent,” Duffy said.

ASB was contacted for comment.

The Consumer NZ survey followed close on the heels of the Federated Farmers banking satisfaction survey, which showed farmers were increasingly dissatisfied with banks.

Five years ago, eight in 10 farmers were happy with their bank, but that had slipped to just six in 10, with rural bank branch closures being blamed for part of the fall.

Beaumont said: “Our independent research shows positive attitudes to banking rose when Covid-19 hit, up from 57 per cent in September 2019 to 62 per cent in May 2020. That’s likely because banks responded well to customers facing financial difficulty due to the Covid economic impact.”

Banks had deferred or reduced repayments on around $70 billion in loans to households and businesses, he said.

There has been an increase in transparency about banking complaints since the Banking Ombudsman began publishing a “complaints dashboard” showing data collected by banks on the number, and nature of complaints.

The latest complaints dashboard covering January, February and March showed a dip in complaints self-reported by banks. The number reported fell 6.6 per cent to 26,020 complaints.

Duffy felt branch closures, the digitisation of banking services, and the withdrawal of cheques, had all contributed to the declining satisfaction with banks.

But the public also frowned on the scale of bank profits.

“The survey indicated that 66 per cent of New Zealanders agreed the profits banks make show that they’re charging too much,” Duffy said.

Only 43 per cent of banking customers thought banks had their best interests at heart, he said.