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Royal commission eroding customers' bank advocacy

27 July 2018 4:30PM
The latest series of results from Roy Morgan research shows that bank customers are now less likely to recommend their bank than they were prior to the banking royal commission. And the banks that appear to be bearing the brunt of the negative publicity of the Hayne royal commission appear to be - unsurprisingly - the four majors.Between February 2018 and June 2018, the number of bank customers who were highly likely ('high advocates') to recommend their main financial institution bank to a friend or colleague fell 4.6 percentage points to 54.4 per cent. (High advocates scored 8, 9 or 10 for their bank on a ten-point scale, where one is 'very unlikely' to recommend to a friend  or colleague and 10 is 'very likely'.) While this is the lowest monthly level since November 2016, it remains well up on the 45.8 per cent in June 2018. The majority of the change (3.9 per cent) was as a result of customers dropping back to becoming only 'medium advocates'.All of the major banks saw their customers' 'highly likely' advocacy rates remain below the six month average for the sector (56.8 per cent), with the best being the CBA on 55.4 per cent (an improvement of 2.4 per cent over the comparable measure in 2017), ahead of Westpac (53.5 per cent), NAB (52.8 per cent) and ANZ (50.2 per cent).By way of contrast, in the six months to June 2018, 83.3 per cent of ING Direct customers were "very likely" to recommend their bank, the highest level of the ten largest banks. In second place was Bendigo Bank with 68.7 per cent, followed by Bank of Queensland (61.2 per cent) and St George (60.5 per cent).In addition to advocacy, Roy Morgan also measures bank customer satisfaction and Net Promoter Score through in-depth face-to-face interviews. The market research firm said both of these metrics have also shown the same downward trend so far in 2018.Norman Morris, industry communications director at Roy Morgan suggested that these results reflect "[an] additional impact on satisfaction with banks, NPS and customer advocacy as they face a continuing level of negative publicity from reporting on the Royal Commission."

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