A new study from non-bank lender State Custodians Home Loans and Galaxy Research found that the majority of Australians would turn their backs on the big banks in the event of a crisis.
The nationwide survey asked 1,005 respondents who they thought would provide the best service when seeking out or re-negotiating a home mortgage or investment loan when faced with a life-changing event such as a business failure, serious illness, death, or unemployment.
Even though the Big Four hold 80% of the nation’s home loan market, the study found that nearly three in four people (72%) believe a major bank would not be able to provide the best service for customers facing a crisis. In contrast, 37% of respondents believe they’d receive the optimum amount of attention from smaller lending institutions such as credit unions and building societies.
“Australians are currently facing increasing uncertainty on numerous fronts, including a stagnant economy, job insecurity, high levels of relationship breakdowns and unhealthy lifestyles leading to chronic illness,” said Joanna Pretty, general manager at State Custodians.
“When you’re in crisis mode it can be very stressful and confusing trying to make any major decision. I think trust is very important in dire situations and sometimes with larger institutions people can feel like they’re ‘just a number’. So any organisation or people who can give you the right information and reassure that they’ll look after you is important.”
According to Pretty, smaller institutions are renowned for their more personalised services, which can help clients who’re going through money-draining personal problems.
“Smaller institutions tend to specialise with different products and services, and are very good at helping people who fall outside traditional parameters,” she said. “They can also have more of an open mind as to what kind of deal they’d be prepared to do with a customer, as they’re used to evaluating extenuating circumstances.”
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