– Amid the ongoing Royal Commission, 50% of Australians wouldn’t recommend their financial institution, and one in four don’t trust don’t trust banks to invest their money well
Sydney: 2 August, 2018 – Against the backdrop of the ongoing Australian Banking and Finance Royal Commission, global measurement company Nielsen reports that over 3.1 million Australians are dissatisfied with their major financial institution over the past 12 months.
Furthermore, over two million Australians say they plan to switch brands within the next six months, with 50% not even prepared to recommend their institution to others.
Generation X (35 to 54 years old), who generally have multiple needs from finance organisations such as mortgages, bank accounts and insurance policies, are the most dissatisfied, with more than one in two (54%) not willing to provide a recommendation to friends or family.
Nielsen’s Head of Financial Services and Insurance, Jo Brockhurst, says: “When you overlay the marketing and brand attributes of the financial institutions compared to the actual experiences, it becomes apparent there is a huge gap between what the customer expects and what is being delivered. At Nielsen, we are calling this ‘The Promise Gap’, where the brand marketing and values of a company are not in sync with the customer’s end experience.”
Nielsen seeks to help brands close an ever-widening gap between the promises being made by institutions in their marketing and advertising and the actual service and experience being delivered to customers. The ‘best practice approach’ to address the ‘promise gap’ comprises of four critical components: 1) brand; 2) experience; 3) marketing and; 4) innovation. Bringing these four attributes into play is seen as the secret to success for organisations who want to align promise and delivery.
Nielsen reports on how to address and mitigate some of the key triggers that drive customers to switch providers. “Our research indicates that while most Australians nominate better interest rates and lower fees as the primary reasons for switching to another financial institution, other factors such as recommendations from friends and professionals, better customer service and larger product offerings also factored into the decision,” says Brockhurst.
“Brands that want to address these frustrations need to capitalise on the three most common reasons cited by Australians as to why they would recommend their financial institution. These are the ease in which they deal with the customer (36%), good customer service (27%), and good value for products and services (26%). Importantly, 20% rank the company’s reputation, and another 20% rank staff as key reasons for recommendation.”
Tim Newman, Head of Customer Service & Experience at ING, adds: “For us customer advocacy is a key driver of the ING business and a higher bar than customer satisfaction. The willingness of our customers to recommend ING to family and friends is the ultimate test of whether our products and services are helping our customers get ahead.”
Brockhurst said word of mouth has always been one of the strongest and highly regarded endorsements a company can receive and perception often becomes reality. “With half of all customers not wanting to recommend their financial service provider to friends and family, there is a huge opportunity for banks, financial services and insurance companies to review the customer experience, internal training and service and product offerings, “ she says.
“Of almost equal importance though is the brand’s reputation. Brand trust reduces customer churn and increases customer engagement. With the latest scandals hitting the headlines on a daily basis, it’s reasonable to assume more Australians will be closely monitoring their bank’s services and products and considering whether to switch to an alternative.”
Brockhurst concludes “Financial institutions need to review all key components of their brand strategy, including customers and employee experience and ensure it aligns with their brand values and promises.”