Satisfaction with banks continues falling
(2 February 2010 – Australia) Banks competing for the business banking dollar have had to sharpen their game, as the number of businesses shifting banks goes on the rise.
According to the Australian Financial Review, Australian banks are competing on a more aggressive level to retain and attract business banking customers.
In an effort to increase their market presence and to make up for a lack of credit demand, some banks are even offering discounts of as much as one percentage point off interest rates and relaxing loan conditions.
Higher lending rates and tougher credit criteria have clearly caused some strain to the relationship between business borrowers and their banks, according to East’s Business Banking Customer Satisfaction Monitor.
The Australian Financial Review also attributed the dissatisfaction to the way some banks treated their customers during the global financial crisis, creating a surge in the number of businesses switching providers.
In the SME market, the overall satisfaction with banks has declined at alarming levels over the past 12 months. East & Partners’ November 2009 Business Banking Customer Satisfaction Monitor also revealed that on a scale from zero to ten, zero being very dissatisfied and ten being very satisfied, the SMEs only gave their banks an overall rating of 4.44.
With the RBA expected to raise rates again this month and banks returning to profit the government’s handling of the sector could definitely shape the election year.
Robert Morgan, East & Partners head of market analysis said that there are now a lot of dissatisfied SMEs which will respond favourably to more attractive interest rates and lending criteria, creating big opportunity for one of the big four banks that is willing to break ranks on pricing and credit policies.
In an effort to increase their market presence and to make up for a lack of credit demand, some banks are even offering discounts of as much as one percentage point off interest rates and relaxing loan conditions.
Higher lending rates and tougher credit criteria have clearly caused some strain to the relationship between business borrowers and their banks, according to East’s Business Banking Customer Satisfaction Monitor.
The Australian Financial Review also attributed the dissatisfaction to the way some banks treated their customers during the global financial crisis, creating a surge in the number of businesses switching providers.
In the SME market, the overall satisfaction with banks has declined at alarming levels over the past 12 months. East & Partners’ November 2009 Business Banking Customer Satisfaction Monitor also revealed that on a scale from zero to ten, zero being very dissatisfied and ten being very satisfied, the SMEs only gave their banks an overall rating of 4.44.
With the RBA expected to raise rates again this month and banks returning to profit the government’s handling of the sector could definitely shape the election year.
Robert Morgan, East & Partners head of market analysis said that there are now a lot of dissatisfied SMEs which will respond favourably to more attractive interest rates and lending criteria, creating big opportunity for one of the big four banks that is willing to break ranks on pricing and credit policies.