Loyal Australian banking customers call for more gratitude from providers

Jonathan Tanner, Senior director, Industry Principal Financial Services & Insurance APJ at Pega

Pegasystems Inc., the low-code platform provider that builds agility into the world’s leading firms, unveiled the findings of its latest research into the state of customer experience in the Australian banking sector. In collaboration with Omnipoll, Pega conducted a national survey of 1,230 people aged 18+. The research reveals more than half (57%) of Australians feel their bank is more concerned with trying to sell new products and services than rewarding loyalty. 

What were the findings of the study?

The study shows that rewarding loyalty is becoming an increasingly vital for consumers: 85% of customers said they feel long-term customers should receive the best rewards and rates.

Conversely, 53% of clients feel their bank provides this. This desire to see loyalty rewarded is unsurprising given Aussies’ long tenures with their banks: 61% of respondents have been with their main bank for 10+ years, while 47% have a tenure of more than 15 years.

Small banks are outperforming the Big 4

Nearly two-thirds (65%) of all Australians are with one of the ‘Big 4’ banks of Australia, and while the Big 4 ranked equally with other banks in ‘net customer satisfaction (81%), smaller banks were shown to be much better at going the extra mile and delighting their customers.

Forty-four per cent of smaller banks’ customers reported ‘to be ‘very satisfied compared to just 33% of Big 4 clients. Regardless of whether clients are with one of the Big 4 or a smaller bank, a lack of loyalty rewards was revealed to be on par with interest rates as the main trigger of churn and are the two top things customers would like to see their banks change.

Banks are falling short of customer needs

The study revealed other areas where customer needs and expectations are not being met:

  • While 86% expect their bank to quickly and transparently process requests (e.g. mortgage applications) and provide quick answers, only 72% agree their main bank delivers on this. 
  • 80% don’t think they should have to continually repeat service requests with their bank – especially across different channels. However, only 64% feel their bank delivers on this.
  • Sixty per cent of banking customers are concerned with green, sustainable environmental business practices, but only 45% think this is a priority for their banks.

While banks are struggling in a variety of areas to meet the ever-changing customer needs, there are several important areas customers feel their banks are doing well. These include interacting on customers’ channel of choice (important to 83% of consumers, delivered by 79% of banks), providing clear and transparent information (92% / 82%), and providing financial products and service options relevant to the customer’s needs (60% / 51%).

What were the executive’s thoughts on the study?

“Aussie banks continue to adapt post-COVID but face challenges in keeping their clients happy. Cost of living continues to go up and financial insecurity is a concern for many Australians. It’s therefore unsurprising to see customers looking to banks to reward their loyalty and show more empathy in both their interactions and provided services,” said Jonathan Tanner, senior director, industry principal financial services & insurance APJ, Pega.

“Many respondents cited receiving no loyalty rewards as a major churn point, and with the CDR now in effect for the banking sector, it’s easier than ever to get a better offer and change providers. Banks have long prioritized incentivizing new customers to join them, it’s clear they now need to start focusing on incentivizing their current customer base to stay.”