More than one in five young people plan to switch banks in the year ahead, according to a new survey.
Industry consultant JD Power reports in its 2020 Australian Retail Banking Satisfaction Study that 22 per cent of Gen Z consumers (those born after 1995) are looking to make a change to their banking arrangements.
Across all age groups, reasons for switching include: interest rates are not competitive (cited by 40 per cent of respondents); charged too many fees (23 per cent); and poor service experience (19 per cent).
JD Power said the pandemic is affecting the way customers manage their banking, with use of online and mobile services higher than use of branch and telephone services.
Mobile wallets and payment apps are now being used by 43 per cent of customers. The most popular mobile app is Apple Pay, which is used by 26 per cent of bank customers.
“The implication for banks is that providing highly functional digital banking is key to maintaining satisfaction and preventing attrition,” the study said.
And banks need to be better at communicating with customers, especially young people who are the least likely to understand account features.
Among the major banks, Commonwealth Bank received the highest customer satisfaction rating, followed by NAB.
Among smaller financial institutions, Heritage Bank received the top ratings, followed by ING, Bendigo Bank, People’s Choice Credit Union and CUA.