Bank: Trust, Loyalty, Satisfaction, Growth

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2014 Consumer Banking Trust: The Big 4 banks have recovered from a slight fall in trust among their customers in 2012. Bendigo Bank, as the regional bank tracked in this study has regained previous trust levels – well ahead of the Big 4 banks at an average of 8/10. Non-Customers continue to distrust the other banks. CBA’s trust among non-customers is lowest and appears to have been hit by the protracted financial planning scandals. Only Bendigo Bank, is, on average, not distrusted by non-customers. Because of customer’s distrust of other banks, despite low trust in their own bank, switching is very unlikely. The bank that can increase it’s trust with non-customers will gain a significant acquisition advantage. The ability to build more trust with own customers will be key determinant of customer product holding, especially wealth and super products.

Text of Bank: Trust, Loyalty, Satisfaction, Growth

  • 1. BANK
  • 2. 3 4 5 6 7 9 15 18 38 39 40 About the study Executive summary Why do we look at trust? How do we look at trust? Demographics Consumer Bank Trust 2014 Trust Distribution HuTrust Analysis Qualitative focus on relationship trust About mext Key Contacts
  • 3. Distrust This study was conducted in May 2014 with a general population sample of almost 1200. It is part of the annual brand trust tracking initiated by mext. The methodology uses HuTrust, a psychological tool to assess the drivers of trust, NPS and satisfaction to help brand owners build more trust, achieve clearly connected bottom line improvements and manage their brands more effectively Mext are brand and customer experience specialists based in Melbourne and Singapore and working with clients globally. The HuTrust methodology is used by HuTrust Partners globally. Clients and service suppliers can integrate the methodology into any of their surveys to better understand the key drivers of their KPIs. For more information please contact: Stefan Grafe Managing Director Mext Stefan.grafe@mextconsulting.com
  • 4. Consumer banking trust: The Big 4 banks have recovered from a slight fall in trust among their customers in 2012. Bendigo Bank, as the regional bank tracked in this study has regained previous trust levels well ahead of the big 4 banks at an average of 8/10. 0 1 2 3 4 5 6 7 8 9 10 2011 2012 2013 2014 Axis Title Bank Trust Comparison 2011 - 2014 ANZ CBA NAB Westpac Bendigo Customers vs non-Customers Non-Customers continue to distrust the other banks. CBAs trust among non- customers is lowest and appears to have been hit by the protracted financial planning scandals. Only Bendigo Bank, is, on average, not distrusted by non- customers. Because of customers distrust of other banks, despite low trust in their own bank, switching is very unlikely. The bank that can increase its trust with non-customers will gain a significant acquisition advantage. The ability to build more trust with own customers will be key determinant of customer product holding, especially wealth and super products. The study shows that the opportunity in consumer banking lies in understanding what trust in an appealing relationship means. Through our qualitative work we shed some light on this. Unlike previous years, the Big 4 banks trust is now driven most by the same driver, Relationship trust. While trust increases over the last years have been marginal, the banks have done well retaining their trust levels despite many public challenges. distrust neutral trust trust high trust
  • 5. Trust is the most powerful human motivator. A 20% improvement in trust can mean a 400% improved customer attitude and behaviour. Trust makes up over 70% of the NPS and over 2/3 of customer satisfaction, the most common KPIs of financial services organisations. Therefore, if we understand trust, we understand what drives (or inhibits) the vast majority of these KPIs. Further, if we understand trust, these KPIs can be more effectively built and managed. 1. Trust is the prerequisite for purchase. In most studies, trust and product performance are equal drivers or purchase and sign up. 2. Trust in itself is not enough. More trust is the key and every little more has a huge impact on customer behaviour. 3. Trust is not a competitive advantage unless you are more trusted than your competitors. A note on NPS and customer satisfaction: Both NPS and satisfaction measures are primarily directed at ones own customers. While they can be benchmarked against competitors, they are less applicable for potential customers and their propensity to choose a provider. Trust doesnt have these inhibitions. Trust by own customers is a clear indicator of loyalty and willingness to buy more. With potential customers it provides a direct understanding of their likelihood to choose one provider over another.
  • 6. 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0 1 2 3 4 5 6 7 8 9 10 Trust Score Likelihood to recommend Feel connected to Go out of my way to buy a specific brand/product 0 1 2 3 4 5 6 7 8 9 10 Distrust No trust Low trust High trust Trust is the root cause of your customers behaviour. The more your customer can trust you, the more business they want do with you. A 20% improvement in trust can mean 400% improved customer predisposition. Score Meaning Behaviour examples 0-4 Distrust Will recommend against, complain a lot, actively work against 5-6 Neutral (dont trust & dont distrust) Sit on the fence. Would switch readily if there is an alternative. Spread products. Dont commit. Question, are critical, but somewhat open to listen. 7-8 Low level of trust Functionally satisfied. Open to listen and slightly positive in their outlook. Still look around and compare. Still spread products. 9-10 High trust Committed. Dont look around, have most products with one provider. Very open to contact and suggestions. Will proactively ask. The Trust Effect HuTrust is trademark of ifm/mext and Stefan Grafe. The HuTrust Model, its facets, descriptors and statements are copyright ifm/mext and may not be used, reproduced or stored in any medium unless expressly permitted by ifm/mext. HuTrust is applied in Brand trust development, Customer experience & value proposition development, Sales and Business Development Performance & Training, Employer branding & Employee engagement, Manager Coaching & Leadership training, transformation and change management and corporate affairs & PR., and Research & Tracking. www.hutrust.com
  • 7. ANZ CBA NAB Westpac Bendigo The sample comprised : 1166 Consumer respondents Consumer customers Consumer Non-customers
  • 8. 7.36 7.48 7.57 7.47 8.04 4.95 4.76 4.96 4.86 5.31 4 5 6 7 8 ANZ CBA NAB Westpac Bendigo Average trust score Customers Non- customers Based on the general population, no bank reaches trusted status But customers, on average, trust their own bank. However, non-customers distrust the Big 4 banks, while they are just trust neutral towards Bendigo Bank. Compared to other service industries such as Telco and Energy, this is a strongly polarised image. Bank Trust 2014 Base: customers vs. non-customers 5.25 5.39 5.27 5.17 5.47 4 5 6 7 8 ANZ CBA NAB Westpac Bendigo Average trust score Bank Trust 2014 Base: All respondents
  • 9. ANZ have slightly increased their trust level even compared to 2011. CBA had made good trust gains in the last years, but this year lost ground. The reason is likely to be the handling of the financial planning issues. Considering the protracted coverage of the issues, trust is probably propped up by the sustained CAN advertising campaign. While nabs break up campaign didnt show a lot of effect to start with, now nab appears to gain trust ground rapidly. This is likely due to significant systems changes and revamped products that now positively impact customers. Westpac lost ground last year, but has regained that ground and added more trust. While Bendigo Bank dipped in 2012, among its own customers, Bendigo Bank has made up all ground and continue to be most trusted (please note, that this is typical for smaller, tightly positioned players). Customers trust in their own bank has slowly increased over the last 4 years. There are some interesting developments for each brand. Bank Trust Comparison 2011-2014 Consumers Base: each bank own customers
  • 10. Except for Bendigo Bank, non-customers score just within the distrust threshold. However, the level of distrust is slowly decreasing. Bank Trust Comparison 2013 2014 Base: each bank non-customers
  • 11. The Big 4 show a bracket pattern with younger and older people showing more trust than the 35-54 year olds. Bendigo Banks Profile differs significantly, with trust increasing with age. Importantly, younger people trust Bendigo Bank less than the other banks, strongly limiting Bendigo Banks ability to attract younger customers. Despite being overall most trusted, the trust age profiles are likely to be a significant inhibitor. Bank Trust 2014 Non Customers Base: each bank non-customers by age Bank Trust 2014 Base: each bank customers by age
  • 12. 28% 29% 28% 30% 23% 39% 32% 37%