The coronavirus pandemic has shaken Australia's major four banks.
The big banks have been forced to assist financially stricken customers and have cut or stopped their usually reliable dividends.
Moreover the second wave of COVID-19 in Victoria has dented the prospect of a swift recovery in the national economy.
And now Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking GrpLtd (ASX: ANZ) have more bad news to deal with.
Analytics firm JD Power this week released its Australia Retail Banking Satisfaction Study results, and it doesn't bode well for the big boys.
Despite their flexibility in helping Australians in trouble due to the COVID-19 recession, all four big banks ranked low in customer satisfaction.
Banks outside the major four averaged 785 points while CBA (776), NAB (771), ANZ (762) and Westpac (758) all fell below that mark.
Heritage Bank (872) and ING (843) topped the list, while ASX-listed Bendigo and Adelaide Bank Ltd (ASX: BEN) came third with 824 points.
Generally, publicly listed institutions fared worse than banks that were privately or mutually owned.
| Bank | Customer satisfaction (out of 1,000) |
| Heritage Bank | 872 |
| ING | 843 |
| Bendigo and Adelaide Bank Ltd (ASX: BEN) | 824 |
| People's Choice Credit Union | 815 |
| CUA | 788 |
| BankSA | 782 |
| Commonwealth Bank of Australia (ASX: CBA) | 776 |
| ME Bank | 775 |
| Bankwest (owned by CBA) | 772 |
| National Australia Bank Ltd (ASX: NAB) | 771 |
| Bank of Melbourne (owned by Westpac) | 770 |
| St George (owned by Westpac) | 769 |
| Suncorp Group Ltd (ASX: SUN) | 767 |
| Bank of Queensland Limited (ASX: BOQ) | 763 |
| Australia and New Zealand Banking GrpLtd (ASX: ANZ) | 762 |
| HSBC Holdings plc (LON: HSBA) | 760 |
| Citigroup Inc (NYSE: C) | 759 |
| Westpac Banking Corp (ASX: WBC) | 758 |
| Source: JD Power, table created by author | |
COVID-19-induced financial anxiety
The pandemic has struck financial anxiety into Australians, with the study finding 46% of bank customers are dissatisfied with their personal circumstances.
A quarter even said the impact of COVID-19 had been "devastating" or "severely hurtful".
"It is imperative that banks understand how to provide better support remotely with no current end in sight to social restrictions." said JD Power banking and payments intelligence head Bronwyn Gill.
"Banks must narrow the gap in support between customers with good and bad financial health… Helping struggling customers make better financial decisions and manage their spending has many positive outcomes, including higher satisfaction, lower attrition, increased reuse and improved advocacy."
The increased time at home has led to online and mobile banking overtaking in-person and phone banking in all age demographics.
But that's led to customers struggling with having any issues resolved. Only 31% of customers said their problem resolution experience was "outstanding", which was down 7 percentage points from the prior year.
"The implication for banks is that providing highly functional digital banking is key to maintaining satisfaction and preventing attrition," JD Power stated.
Younger customers are less likely to put up with an unsatisfactory experience, with 22% of those born after 1995 threatening to switch banks. That compares to just 5% of Australians born before 1964 who are thinking of doing the same.
Australia Retail Banking Satisfaction Study was compiled from a survey of 5,584 bank customers. Only banks with more than 100 satisfaction responses were rated.
