One-third of New Zealand's banking customers would not recommend their bank to family and friends, according to a study released today by Gallup Consulting.
Gallup Consulting said only 23 per cent of customers were "fully engaged'' with their banks, while one in five customers were actively disengaged.
The study also found that 88 per cent of people did not feel any of the bank brands stood out from rest, while 34 per cent would not recommend their bank to family and friends.
Of the major banks, Kiwibank rated best in terms of service and competitive offers, while ASB was seen as the friendliest and most innovative. Other brands surveyed in the study included National Bank, ANZ, BNZ and Westpac, which were fairly close together.
"The study reveals many customers feel banks have become stale and rudimentary, providing standard levels of customer service but not going the 'extra mile' to connect with customers and thereby create stronger brand advocacy,'' Robyn Hart, a senior consultant at Gallup Consulting said in a statement.
She said many people surveyed saw banks as a "necessary evil'' and felt disgruntled and dissatisfied with their experiences.
"The results are worrying and show that banks are struggling to differentiate themselves from each other,'' she said.
"They appear to be simply 'going through the motions' when it comes to looking after their customers, rather than looking to offer something that creates engagement and loyalty.''
The study involved 2584 customer interviews - averaging around 450 interviews per bank, with the exception of KiwiBank, for which 325 interviews were conducted.
Hart, who moved to Gallup two years ago from ASB after 16 years as the bank's "engagement leader'' said banks had become obsessed with the base-line customer satisfaction measurement.
She told APNZ in an interview that the banks had "lulled themselves into a false sense of security'' by focusing on customer satisfaction surveys, which generally tended not to differ too much.
"However, when you go a bit deeper into the 'engagement space' - that's when we see a that there is a bit of a difference,'' she told APNZ.
Some of the drivers of "engagement'' were whether customers felt they were valued, whether their bank made it easier for them to do business and whether they felt their banks were handling their problems well.
Gallup Consulting's studies, both in New Zealand and overseas, found that banks needed to uncover what was important to customers and to engage with them.
Hart said there was a direct correlation between customer engagement and operational performance for business.
The higher the customer engagement level, the greater the chance of increased revenue through enhanced loyalty, reduced "churn'' and improved market share.
Hart said Gallup Consulting based its measurements of customer engagement on elements of confidence, integrity and pride.
"The global research we have conducted at Gallup over several decades shows customers who feel these emotions, or who are engaged, are more likely to recommend a business to others and much less likely to switch. Emotions drive consumer behaviour,'' she said.
Australia's so called big four banks account for about 90 per cent of the New Zealand market.
A spokesman for ANZ - the biggest in the local market - said one in two New Zealanders had a financial relationship with ANZ or one of its brands. "We don't take that for granted,'' he said.