In 2000, when Kiwibank was first mooted, 40 per cent said they might consider joining. By last year that had dropped to 16 per cent and in the latest survey it is down to 13 per cent.
In part that is because customer satisfaction with banks remains high.
In the 2000 survey 63 per cent of residential customers said they were satisfied or very satisfied with their banks. Last year that jumped to 69 per cent and in the latest survey the figure fell marginally to 68 per cent.
Business customers were even more contented: in the latest survey 73 per cent were satisfied or very satisfied, up from 71 per cent last year and 58 per cent the year before.
But 16 per cent of residential customers said they were so dissatisfied that they were seriously thinking about switching banks. Kiwibank was now their top choice, pushing longtime favourite the ASB Bank into second place.
Of that group of dissatisfied customers, 32 per cent considered Kiwibank their best alternative, followed by ASB (15 per cent), National Bank and TSB (both 13 per cent) and PSIS (10 per cent).
But one of the survey's authors, marketing department lecturer Andrew Parsons, said that even among the grumpiest customers the difficulty of making a change often proved a major deterrent.
"People may find the notion of switching to Kiwibank attractive," he said, "but there is a great deal of customer inertia. It's easier to stay where you are than to go to the bother of making a change.
"Very few people ever change banks because they like the look of another bank or are attracted by its advertising. There has to be a definite driver, something that makes them so angry they decide to leave their existing bank."
Even then, he said, dissatisfied customers often found changing banks more costly and complex than they expected.
"When people actually start the process of changing banks they are often surprised at the cost of ending a mortgage before its term or breaking a term deposit.
"Then there is the complexity of changing over accounts and the inconvenience of probably being without a chequebook or an ATM card for an interim period.
"As a result, a lot of people just live with their dissatisfaction."
Of the longstanding banks, the survey found that WestpacTrust, the BNZ and the ANZ were most at risk of losing customers. Nineteen per cent of BNZ and Westpac customers and 23 per cent of ANZ's said they were considering switching.
Only 10 per cent of ASB customers and 11 per cent of National Bank's fell into that category. The smaller, New Zealand-owned TSB had almost no potential defectors.
That finding mirrors the results of the main satisfaction survey.
TSB topped the list, with 97 per cent of its residential customers satisfied or very satisfied, a further improvement on its high approval levels in the previous survey.
ASB was the best of the major banks with 82 per cent satisfied or very satisfied, a slight drop from the year before, while the National Bank was steady on 78 per cent.
WestpacTrust, which two years ago had only 46 per cent of its customers happy, continued its improvement to 62 per cent. The ANZ also improved to 59 per cent. But the BNZ's approval rating dropped from 64 per cent to 57 per cent.
Parsons said it was obvious that the banks were working hard at keeping their customers happy.
"The slump in customer satisfaction that was observed a few years ago seems to be behind us now, which is good news for New Zealand businesses."
The findings were based on a nationwide survey of 1178 residential customers and 1444 businesses.
Kiwibank was not included in the results because it did not feature in sufficient returns. Parsons said it would be incorporated in the survey once there was sufficient information to be statistically valid.
Bank survey charts and graphs
Further reading
nzherald.co.nz/kiwibank
