Bank customers don't feel they're getting fair value, when it comes to fees, interest rates and how banks respond when something goes wrong.
Consumer NZ says there is widespread dissatisfaction with banking value, pricing and trust.
More than 42% of customers think bank profits are unacceptable, with lower-income New Zealanders the most critical.
For the first time in a decade no bank has reached Consumer NZ’s customer satisfaction threshold for its Consumer Choice award.
The annual award is given to banks that rate above average for customer satisfaction and meet other Consumer NZ performance criteria
Trust in banks has declined significantly, with Consumer NZ chief executive Jon Duffy highlighting that a lack of competition and high profits are key drivers of customer dissatisfaction.
The research, based on a survey of 1,958 New Zealanders, shows Westpac came in at the bottom of the table, ranking lowest for responsible lending, value for money, timely responses, fees and charges, phone banking, branch banking, and the number of customers rating themselves “very satisfied”.
Duffy told RNZ the area of most concern for Westpac is the value for money area. “Westpac is really seen as not value for money."
Kiwibank trailed in the trust stakes at 70%, against a sector average of 75%.
Smaller banks continue to outperform the four big Australian-owned banks in customer service, though none met the high threshold required for a People's Choice endorsement this year
The Co-operative Bank had performed best in terms of customer service.
"Over the history of this award, it's often the smaller banks that have done better than the larger banks, simply because they're a bit scrappier - they're actively trying to get your custom," Duffy says.
Despite the low level of satisfaction in the survey, only 4% of New Zealanders switched banks in the past year.
Duffy suggests it allows larger banks to "rest on their laurels" without improving service.
He says the hassle involved with changing banks has been overstated, and he encourages people who are dissatisfied to shop around for a better deal.
“It’s consumer behaviour that helps encourage competition and put pressure on banks to sharpen pricing, lift service and earn trust.
“By always keeping an eye out for the best deal and moving when you find a better one, New Zealanders will find they have more options and better leverage.”
“Open banking is here and, while it is early days, it could lead to cheaper ways to make payments and more competition,” Duffy says. “But consumers won’t see that until it’s widely adopted.”
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