“Bank bashing” has almost attained the position of a national sport in Australia, so some may be surprised to learn that Canstar Blue?s most recent banking customer satisfaction survey revealed the following: in the last 12 months, only five percent of customers chose to switch from their main financial institution. The overwhelming reason why people don?t switch? Because they?re happy with the service provided by their current bank.
Of those who do switch, though, interest rates, fees and better products/offers were the compelling reasons. We asked three challenger banks to let us know what product or service is currently resonating with their clients.
After a seven-year slumber, the Bank of Melbourne brand was relaunched in mid 2011 and according to Bank of Melbourne Chief Executive, Scott Tanner, that relaunch has successfully engaged with customers. “We set out to provide Victorians with a genuine banking alternative – one that is distinctly Victorian, and one that is progressive, modern and innovative,” he says. “Our results confirm that many Victorians see great value in what we are offering. With more than 70,000 new customers moving to the Bank of Melbourne, and many bringing all of their banking to us, Victorians are expressing a desire to build a long-term relationship with Bank of Melbourne.”
Mr Tanner highlights two services that have proven popular with new customers so far this year: their $700 off switching costs for new home loan applicants campaign and their “Get a better rate than the Big 4” campaign, whereby Bank of Melbourne offered to beat any advertised home loan rate by ANZ, CommBank, Westpac and NAB.
Bank of Melbourne are on a growth track, having opened their 70th branch (in Gippsland) in April. There are another five branches planned by the end of 2013.
While an industry-average of only 41% of respondents in the Canstar Blue survey claimed to always shop around for the best deal, approximately 62% of Citibank customers claim to be deal-savvy. So what Citibank products or services have caught their eye? Head of Retail Banking for Citibank in Australia, David MouillÃ©, nominates the Citibank Plus everyday account as a consistent source of new business.
“We have put a great deal of effort into developing what we believe is the best transaction account in Australia – our Citibank Plus account,” he says. “It?s proving to be an extremely successful product as consumers have overwhelmingly recognised the value. A lot of people talk about ?fee free? accounts but they are not really free. What they mean is ?monthly fee free?, which is quite different. On this account, though, we have taken out every single fee. You can take it anywhere in the world, pay for anything anywhere and there are no fees.”
Mr MouillÃ© also nominates Citibank?s easy-to-use switching process as a competitor advantage. “We make it easier for people to move,” he says. “When the regulations came in in July we spent a great deal of time focusing on the switching process and really refining it; I think we have really cracked it! In fact feedback from some mystery shopping was that our switching process is managed the best. We have really focused on training our staff in relation to switching and how to make it easy for customers, because many people do not find it easy to switch.”
Head of Corporate Affairs for ING DIRECT, David Bren, nominates advocacy as one of the organisation?s greatest advantages. “Our existing customers and people who do switch to us are generally very pleased with the products and we encourage them to advocate for us,” he says. “Social media provides an opportunity to publish their advocacy, but you should never underestimate the old-fashioned word of mouth! I had a situation in the supermarket just recently where the lady in front of me pulled out an Orange Everyday card to pay for her groceries. She saw me looking at the card and she said: “you get a 5% discount when you use this card.” I just nodded – it?s was a great example of advocacy.
It?s an example that is backed up by market research conducted by ING DIRECT in November 2012, which reported that 72% of customers mention their Orange Everyday account to others and 73% of savings customers have recommended ING DIRECT to others.
Their low-fee environment is also a competitive advantage. “Customers know that we have never had any fees on savings accounts and people understand that,” says Mr Bren. “On our transaction accounts, the only fee is for ATM withdrawals under $200 – and we encourage consumers to use eftpos to avoid that.”
ING Direct?s Orange Everyday account and Citibank?s Citibank Plus Everyday account, along with Bank of Melbourne?s Complete Freedom Account are all CANSTAR five star-rated transaction accounts. Make sure you download our latest Savings & Transaction comparison report.