Australian consumers have rated the non-majors superior to the big four banks, mozo.com.au have revealed.
The website, which recently held its People’s Choice Awards, said while satisfaction is up across the board, the big four banks still lag behind the challenger banks and mutuals when it comes to customer satisfaction.
ING DIRECT took out the top spot at the awards, which are based on over 28,000 customer reviews, with an overall rating of 8.98 out of 10, while NAB scored the highest of the big four with an overall rating of 7.76.
ME Bank was another stellar performing in the eyes of consumers, taking out the best home loans award, along with best debit and best credit cards.
Mozo director Kirsty Lamont said record low interest rates are ushering in a golden era for banking, with customer satisfaction increasing across the industry by 11 per cent from 2012 to 2013.
According to Ms Lamont, sharp pricing across the board means banks are now competing in other areas.
“With rates at all-time lows, banking providers will have to work a lot harder to attract switching customers and the battleground will shift more towards customer service, convenience and brand trust as well as pricing,” she said.
According to the most recent AFG Competition Index, the overall share of loans processed for non-major banks rose from 20.6 per cent in March to 24.8 per cent in June this year.
Allen Collins from Smartline Personal Mortgage Advisers believes as the wider economy moves on from the global financial crisis (GFC), his customers appear to be warming once again to non-major lenders.
“I think the perceptions consumers had during and just after the GFC have begun to change a fair bit in the last couple of years,” he told The Adviser.
At the same time, Tim Brown of Vow Financial said he has seen a four per cent increase in the number of loans written by non-major banks over the past year.
“Our market share stats have only been going for two years, but I can tell that non-major banks represent 20 per cent of all loans and that is an increase of 4 per cent on the prior year,” he said.
John Minz, chief executive officer of Heritage Bank, said this bodes well for the non-majors as it is customer service in which they really excel.
“We always have the best interest of the borrowers at heart and their best interest is served through value, flexibility of product and quality of service,” he said.
Mr Minz says while the bigger banks can provide short-term offers to entice customers, the non- majors focus on continued value and long-term service.
“What the smaller entities do is ensure we are providing value and service all the time, not just in fine weather and when it suits us, and that’s not the case with the major banks,” he said.