The latest Roy Morgan Net Trust Score Survey was conducted days after the Hayne Royal Commission report which detailed years of sharp practice at financial institutions, including charging fees for no service, lying to regulators and delivering poor advice that cost customers millions of dollars.
The report singled out National Australia Bank for particular criticism, leading to the resignations of the chairman and CEO.
In January 36.9% of Australians distrusted NAB, but in the immediate wake of the report’s release the number of Australians distrusting NAB soared to 53.7%, according to Roy Morgan.
Simultaneously, NAB’s level of trust plunged from 18.5% to 11.5% delivering it the banking sector’s worst Net Trust Score of -42.2%, with the other three major brands in the minus twenties.
“This is the highest level of distrust we have ever seen for a bank brand in Australia,” said CEO Michele Levine, who described it as a “startling result”.
“This low level of trust sets a new benchmark for Australia’s banks,” she continued. “The real question is what happens next.”
“Without trust there is no civil society. The Australian population has now expressed their anger and distrust with Australian banks. It is now time to rebuild that trust.”
Banks should not take refuge in the fact that customer satisfaction levels remain relatively strong.
January research from Roy Morgan showed this at 78%, but at the same time Nielsen was reporting that more than 2.1 million Australians were looking to switch banks within the next six months.
Two thirds of those are big four bank customers, Broker News noted, and within that group a significant 16% are looking to change to a digital bank.
The advent of open banking is also changing how consumers regard banking brands and Jo Brockhurst, Nielsen’s head of financial Services and insurance, observed that “The trend towards digital banks is paving the way for neobanks [typically app-only] to gain market share.”
“While early adopters of neobanks have traditionally been millennials (age 18 to 35), their customer base has rapidly expanded from 18 to 80-year-olds for some brands in Australia,” she added.
Sourced from Roy Morgan, Broker News, Guardian; additional content by WARC staff