Bank customers are fed up by the poor service they're receiving from their banks, new research by Fujitsu Consulting has revealed.
A survey of 26,000 retail bank customers found "toxic servicing" as the highest concern amongst customers at 31%, three times greater than the next biggest frustration, which was complex terms and conditions.
Fujitsu's definition of toxic servicing includes being passed around a call centre, being cut-off on the phone, poor product knowledge amongst branch staff and hidden fees and charges.
"Contrary to what many financial services businesses assume, price isn't the primary driver of customer churn," said Martin North, managing consulting director, Fujitsu Australia and New Zealand. "Our research shows that, in reality, poor service is the number one 'toxic' issue driving customer churn in the financial services industry."
North also said because customer churn is at an all-time high, banks need to focus on retaining customers, particularly the most profitable ones. He stressed that poor servicing required immediate attention.
While 26% of those surveyed said they would change banks for a better rate, it was telling that as much as 23% of customers were looking for better service.
"Despite significant inertia, customers who are exposed to toxic servicing are highly likely to switch providers," said North.
The survey noted that 80% of people would consider switching financial service providers altogether.
"This has been a long time coming, banks have been taking their customers for granted for too long and customers have a right to feel upset," says Wayne Ormond, Executive Chairman & Founder of Refund Home Loans. "This is why 1 in 3 Australians are now using a mortgage broker, so they don't have to deal with the banks. Clients can actually develop a relationship with their broker and know that the broker will work to find what is best for them as opposed to what best suits the bank."
However, Michael Tsoa-Lee, consumer advocate and communications with broker firm Mates Rates, refuted the results of the survey. "Our panel of lenders includes the banks and I believe they offer fantastic service to our customers. The vast majority of my clients are pleased with the banks because realistically, they offer more competitive overall mortgage solutions in most cases."
Tsoa-Lee added that if services in those banks are slack, a good broker should get involved. "If we have a situation where a customer isn't sure where to go or they're not getting the support they need, we get involved because we see that as part of our responsibility."
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