Customers happy with KiwiBank, TSB

State-owned industry fledgling KiwiBank has helped drive a significant increase in overall customer satisfaction across the entire sector, a survey shows today.

The University of Auckland Business Schools Retail Bank Customer survey has found KiwiBank shared first place with long-time leader Taranaki-based TSB Bank this year with 95 per cent of customers saying they were satisfied to very satisfied.

That puts them 11 percentage points ahead of ASB Bank, their nearest rival among the big Australian-owned banks that dominate by market share.

On average, 77 per cent of the 885 retail customers surveyed were satisfied with their bank, up from 67 per cent the last time the survey was conducted in 2003.

Richard Brookes, of Auckland University Business School, said KiwiBank's success, particularly in picking up "middle New Zealand customers", was a real wake-up call to the other players.

The two banks were the smallest among the seven surveyed and their strong showing "perhaps indicates just how difficult it is for the bigger players to effectively balance the competing demands of shareholder returns and customer service, including fees".

But some of the increase in overall satisfaction was due to KiwiBank and TSB Bank being over-represented in the survey sample relative to their market share.

Following ASB Bank among the big operators was ANZ-owned National Bank at 81 per cent and then BNZ at 72 per cent. All of the big banks, bar the BNZ, showed significant increases in customer satisfaction with ANZ the big improver.

Its proportion of satisfied or very satisfied customers climbed from 52 per cent in 2003, to 69 per cent, overtaking Westpac in the process.

The survey also showed 37 per cent of respondents thought bank charges, fees and interest were excessive or high and 21 per cent were "somewhat likely or very likely to switch banks", unchanged from 2003.