The home loan interest rate reductions over the last two years have increased overall satisfaction levels among the Australian banks' customers, according to Roy Morgan Research.With no change in rates since August 2013, though, the impact of these reductions is wearing off, said Norman Morris, industry communications director at Roy Morgan.The latest round of his firm's bank customer survey showed that in February satisfaction levels remained unchanged, compared to January. The customers of the Big Four banks most likely to give their bank an improved rating were those with home loans.In the six months to February 2014, CBA maintained its top ranking among the majors, followed by NAB, Westpac and ANZ. The smaller banks, however, remained clear overall pace-setters with 14 banks scoring higher satisfaction rankings than the best of the Big Four. The  leader was Teachers Mutual Bank on 91.2 per cent."The majority of bank customers do not have a home loan and will be looking for improvements in areas such as fees, service, products and higher interest rates," said Morris."The increased use of internet banking has also contributed to increased satisfaction overall because customer satisfaction with this channel now exceeds their satisfaction with branches for each of the Big Four banks. The challenge here will be to raise the satisfaction level of other channels such as branches and phone banking which remain the preferred method for many customers when dealing with their bank."This view was echoed in a Global Consumer Banking Survey by EY, which indicated Australian banks that concentrate on "channel migration" for cost benefits alone, at the expense of personalising customer experiences risk losing share to non-traditional players. Paul Siviour, EY's Oceania banking and capital markets leader, said that as more basic transactions such as balance inquiries, bill payments, transfers and administrative functions are being conducted online, banks should be using branch and call centre staff to handle more complex inquiries.Elsewhere in the EY report, it was suggested that lower fees and "an innovative approach" would convince most bank customers to use a non-financial provider for banking services."Customers expect to receive the same high-quality service experience from their financial service provider, regardless of which channel they use and banks need to ensure they are delivering on these expectations," Siviour said."In this environment, banks that do not differentiate themselves through the personalisation of services are leaving themselves in danger of competing only on price."