Clients rate customer-owned banks highly

Customer-owned banks are riding high on a wave of member contentment, with the latest Roy Morgan report showing that they continue to outclass their major bank competitors when it comes to customer satisfaction.

And mortgage brokers have a big part to play in customers’ high satisfaction levels with customer-owned banks as the third-party channel strengthens its partnerships with the mutuals sector.

The newly released Roy Morgan Customer Satisfaction Consumer Banking in Australia report revealed an 89.5% satisfaction rate for Australians who used customer-owned banks as their main financial institution.

This compares to a 75.4% rating for major banks, and an average rating of 78.3% for all banks.

For overall customer satisfaction, the report showed that P&N Bank topped the list at 93.4%, followed by Newcastle Permanent (91.5%) and People’s Choice Credit Union (89.9%) (which will soon become People First Bank).

Customer-owned banks also topped the list for satisfaction with main financial institutions, with  Teachers Mutual Bank Limited at 95%, Heritage Bank (93.6%), Greater Bank (91.3%) Beyond Bank (90.5%) and People’s Choice Credit Union (89.7%).

In the last 20 years, while customer satisfaction for major banks had dipped as low as the mid-50% range, customer satisfaction for mutual banks, credit unions and building societies consistently remains above 80%.

The Customer Owned Banking Association (COBA) said the ratings reflected the distinct alternative customer-owned banks offer to investor-owned institutions.

“The customer-owned model allows mutual banks and credit unions to prioritise reinvesting profits back into customers and communities, rather than maximising shareholder returns and the need to direct profits towards paying dividends,” COBA CEO Michael Lawrence (pictured above left) said.

“This means they can make decisions that genuinely benefit their customers, such as offering competitive rates, better local service and reinvesting in communities.”

Lawrence said the report reaffirmed the customer-owned banking sector’s dedication to delivering better outcomes for customers, resulting in consistently high satisfaction levels.

“With 55 customer-owned banks to choose from in Australia, COBA has developed Find-a-bank, an online tool to help you find a mutual bank or credit union that aligns with your needs and values.”

Teachers Mutual Bank Limited CEO Anthony Hughes (pictured above right) said he was humbled by the bank’s recognition and it was also a wonderful acknowledgment for the passionate teams which help and serve customers every day.

“We are incredibly focused on delivering the best service and outcomes for our customers each and every day,” Hughes said. “To be presented this recognition again, having also received it in 2022, shows that we’re doing something very right.

TMBL’s customer satisfaction surveys regularly indicated its customers were highly satisfied with its services.

Hughes said what made the recognition so special “is that the customers surveyed identified Teachers Mutual Bank as their main bank and then gave us a customer satisfaction score of 95%”.

“This result underscores how our customers value the helpfulness of our teams, the quality of our products, and the trust they have with our bank,” Hughes said.

P&N Bank executive general manager retail banking Angela Newland (pictured above centre) credited the result to the bank’s team members.

“This recognition is testament to the commitment of our people in putting our customers at the forefront of everything we do,” Newland said.

“Whether our customers love to visit our branches, call our Perth-based call centre, interact with us digitally or through their broker – providing seamless, transparent, and personalised service is at the heart of everything we do.”

How brokers contribute to customer satisfaction

So how have mortgage brokers contributed to the success of customer-owned banks when it comes to achieving such high satisfaction levels among its customers?

Lawrence said customer-owned banks and brokers shared a commitment to putting customers first.

“This synergy creates a powerful recipe for satisfaction, where personalised service, competitive products, and a focus on customer needs come together,” he said.

“The broker channel is a vital bridge for many of our members, connecting customers with the unique benefits of customer-owned banks. This partnership ensures borrowers find the right home loan solutions, delivered with the care and attention that fuels high satisfaction.”

Lawrence said the Roy Morgan report revealed customer-owned banks continued to significantly outperform major banks in customer satisfaction, a trend that had persisted for decades.

“This is great news for brokers with clients who rate customer service highly, and who want banking with purpose.”

Kaine Adamson (pictured below), general manager broker at P&N Group, said the bank was a relationship-driven business.

“We view our relationships with brokers as true partnerships, based on trust and transparency,” Adamson said. “The best part of our industry is that brokers will always share their feedback, especially when they know we will listen and act on their suggestions.”

Adamson said listening to P&N Bank’s brokers and incorporating their feedback into the bank’s daily operations had been crucial to its success.

“As a result, our broker satisfaction scores have increased by 32%, putting us on par with some market leaders in certain areas when it comes to delivering a great broker experience.”

Brokers had told the bank that they were spending a disproportionate amount of time repricing customers, especially those coming off maturing fixed rates, with their existing lender.

Adamson said in response P&N Bank developed a fixed rate revert product where customers could roll off their maturing fixed rate product and onto competitively priced acquisition rates.

“We were able to address a widespread challenge faced by our brokers, showcasing our commitment to listening to their feedback and finding innovative solutions to widespread problems.

“Given 74% of all new home loans are written by mortgage brokers (MFAA’s Industry Intelligence Service report), as well as the fact they play a key role in our customers' home buying journey, broker satisfaction is crucial.”

Adamson said while the bank had made significant progress there were still areas it needed to focus on.

“We’re committed to continuing to partner with brokers to enhance the experience for them and their clients.”

The Roy Morgan Customer Satisfaction Consumer Banking in Australia report was based on extensive research, including more than 60,000 personal interviews, and analysis of customer satisfaction data across the Australian banking sector in the last 12 months (April 2023 to May 2024).