Dramatic fall from grace for WestpacTrust

By RICHARD BRADDELL

An annual survey of banking satisfaction is good news for Jim Anderton but bad news for WestpacTrust.

The survey has found that New Zealanders like the idea of Mr Anderton's People's Bank, but the country's largest retail bank has suffered a dramatic slump in customer satisfaction.

While 30 per cent oppose the concept of a People's Bank, 54 per cent think it a good idea, apparently persuaded by the belief that present services are too expensive.

The survey of customer satisfaction by Auckland University's business school, also found that support for internet banking is beginning to take off, with 15 per cent now using it and 26 per cent of those who do not saying they may adopt it in the coming year.

However, threequarters of those who do not use internet banking say they never will, suggesting there will be an uphill battle to get the majority of bank customers online.

The survey was all bad news for WestpacTrust, which holds around 26 per cent of the retail market.

Its customer satisfaction levels plummeted below previously bottom-ranked ANZ.

Dr Mark Colgate, of the business school's marketing department, said WestpacTrust's fall from grace in the past couple of years had been dramatic.

"If you look at their satisfaction ratings you have to think they are in real trouble."

Twenty-nine per cent of WestpacTrust's customers are considering leaving, says the survey, driving up the average for the industry to 17 per cent.

Worse still, disillusionment seems strongest among the highly paid (the most profitable segment), with a quarter of customers who are on combined household incomes exceeding $100,000 considering switching to another bank.

That compares with 13 per cent for those on incomes between $20,000 and $39,999.

"A lot of people believe it's the smaller, low-value customers who want to switch and the higher-value ones who are quite satisfied with the banks. Well, that's clearly not the case," Dr Colgate said.

While WestpactTrust has performed poorly in previous surveys, it had been assumed that dissatisfaction was largely confined to customers acquired during the Trust Bank merger. That conclusion also no longer appeared valid, given the low level of satisfaction, Dr Colgate said.

The university survey is one of the few publicly available indicators of bank customer satisfaction.

The institutions routinely conduct customer satisfaction surveys but results are a closely guarded secret.

A senior bank executive said of last year's survey that it accurately reflected his bank's research.

While WestpacTrust has slumped, the perennial favourites, ASB Bank and National, retain their top positions and the Bank of New Zealand has continued its recovery from the depths.

In comparison with WestpacTrust's dissatisfaction rating, ANZ is at 20 per cent, and ASB at 6 per cent.

Of customers who would move, 20 per cent say they would go to ASB Bank, and 8 to 9 per cent to National and BNZ.

Smaller-ranked TSB is also top in the popularity rankings, along with ASB.

"National's current customers are happy," Dr Colgate said, "but they are not currently in the choice of people who are thinking of switching."