New research finds that Australian customer satisfaction with mobile and internet banking dropped in 2019.
Like many other aspects of life these days, banking is becoming increasingly digital and people expect to benefit from the convenience of digital banking. Yet, the J.D. 2019 Australian Retail Banking Satisfaction Study reported that Australian consumers are not satisfied with the current digital products from their banks.
According to the study, which was released on 19 November 2019, national online banking declined by 25 points while customer satisfaction with mobile banking apps dropped by 27 points since 2018. Customer dissatisfaction also applies to the Big Four banks where customer satisfaction with mobile apps has dropped 21 points in 2019. The Big Four lag behind Direct Banks.
ING has the highest overall customer satisfaction with mobile banking satisfaction 78 points higher than that of the Big Four and internet banking satisfaction 73 points higher than that for the Big Four.
Direct bank customers are more likely to say that the commonly used banking features (such as inter-account transfers, e-statements, bill payments and person-to-person transactions) are quite easy to use than customers of the Big Four.
According to the study, 37% of the survey respondents confirmed that they would “definitely/probably open an account with a virtual bank” in 2019. Also, the use of virtual banks increased by 32% from 2018 to 2019. Obviously, Australians are now more open to virtual banks than they used to be in the past.
The study discovered that only 8% of Australians who participated actually switched banks and 24% of those who bank with the Big Four claim that switching to another bank is too difficult. It is clear that Australians are reluctant to switch banks despite the growing dissatisfaction with their digital banking experience.
Contactless payments keep growing with the use of mobile wallets and payment apps increasing from 21% in 2018 to 28% in 2019. The most popular ones are Masterpass, Google Pay and CommBank’s Tap & Pay. However, Australians have been slow to adopt payments through Osko. The survey found that only 20% of the survey respondents have used Osko while 61% are not aware of its existence. Awareness is highest among generations Y and Z.
The report pointed out that this uninspiring digital experience with some of Australia’s big banks opens up a huge opportunity for neobanks to increase competition in the market by addressing customers’ pain points. A neobank is a virtual bank. It operates completely digitally mostly through an app, without physical infrastructure (such as an office or a branch) using software that was developed from scratch.
The head of global business intelligence at J.D. Power, Bronwyn Gill is also convinced that open banking will increase competition and enable banking customers to switch to those banks that offer the best digital experience. She said, “The upcoming introduction of Open Banking and Direct Debit transfer changes, along with declining digital satisfaction, could open the door to new competitors and lead to massive defections… Customers will flock to those banks which offer a superior digital experience, underpinned by trust and a deeper customer relationship.”
N.B. Open banking enables customers to ask that their data be sent to other banks, giving customers control over their data. It was legalised in August 2019 in Australia.
The 2019 study involved 4,834 credit cardholders. The retail banking satisfaction study analyzes the retail banking customers’ satisfaction with their main bank. The factors measured include fees, account activities, account information, facility, product offerings, and problem resolution. It also measures the effect that customer satisfaction, or lack thereof, has on customer loyalty, retention and advocacy. It provides important benchmarking information and a number of quantifiable and actionable key performance indicators for customer satisfaction.