Small and regional banks are performing strongly across multiple areas and are providing a higher and more consistent service across the board than major banks, making them more popular as decided by customers, according to J.D. Power.
J.D. Power senior country manager, Loi Truong, said that small banks had performed better in areas that were of most importance to customers and also had less customer-reported problems than the country's biggest banks.
"Smaller banks in Australia are able to provide a higher level of service… than the major banks, which along with improved transparency on fees, helps place them in a good position," he said.
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J.D. Power's inaugural study on customer satisfaction ranked account activities, account information, fees, facilities, product offerings and problem resolution, with satisfaction calculated on a 1,000-point scale. The study found a five per cent difference in favour of non-major banks for customers who had difficulties understanding account fees, while the average wait time at a non-major bank branch was three minutes less than at a major.
Heritage Bank ranked the highest in customer satisfaction for retail banking out of the non-major banks, with a total satisfaction score of 829. The leader of the major banks was Commonwealth Bank (CBA), with an overall score of 754.