7 May 2020 – The Big 4 banks have improved their trust with the Australian public during the COVID-19 pandemic but they still rank lower than the majority of banks, according to the latest quarterly figures released by the Australian Banking Brand and Trust Index. Their market dominance significantly impacting banking’s overall industry trust score, compared to 17 other key consumer industries.
The Trust Index surveyed 1,250 Australians in relation to 31 banks, including neo banks. Only nine of the banks did not improve their trust with the public over the past three months.
The biggest improver of the Big 4 was Westpac which went from negative territory (minus 2) to plus 3 – an improvement of 5 points. NAB improved 4 points, ANZ 3 points and Commonwealth 1 point.
However, Westpac was ranked 29th of the 31 banks, ahead of only AMP and the Bank of China which are both in negative territory. The other three were clustered together with NAB and Commonwealth ranked at 22nd and 23rd and ANZ at 24th.
“The Big 4 have been through the Royal Commission and Westpac having the financial watchdog AUSTRAC level 23 million allegations against it for breaches of money-laundering and counter-terrorism finance laws,” said Tim Clover, CEO and Founder at research platform Glow which has developed the Index.
“With COVID-19, the banks have had an ideal opportunity to raise their trust levels as the government has asked them to relax some requirements particularly related to the payment of the JobKeeper subsidy along with the halting of mortgages for hundreds of thousands of Australians.
“And yes the Big 4 have increased their trust, but not as much as they perhaps would have liked.
“Many recent studies have confirmed that consumers expect brands to help the community right now. Banks, even more so, have a huge role to play in extending forgiveness, lines of credit and supporting small businesses.”
Topping the Index for the quarter for the first time was Greater Bank, an Australian customer-owned bank and mutual financial institution with 59 locations around the country. Its rating went from 20 to 23 which moved it up from fourth place from the December Index.
Bendigo Bank, which was No.1 in December, slipped to fifth place with its rating going from 23 to 20.
CUA, HSBC and AMP biggest improvers among second tier banks
The biggest increases were CUA which went from a rating of 14 in December to 20 which saw it move from 8th place to 4th. HSBC also increased by 6 points from 4 to 10 and saw it move from 23rd place to 18th. AMP also increased by 6 points but it is still in negative territory having gone from a rating of minus 14 in December to minus 8 this quarter. The only bank with a lower rating is the Bank of China which went from minus 12 to minus 21. Only AMP and Bank of China have a minus rating.
Both the Police & Nurses Bank and Adelaide Bank increased their rating by 5 points with Greater Bank, Bank of Sydney, Bank of Queensland and Citibank increasing by 3 points.
Up Bank Leads the Digital War
Neo banks have been included in the index for the first time and Up Bank has made an impressive debut, ranked 7th. The neo bank was founded only two years ago and is a collaboration between software development company Ferocia and Bendigo and Adelaide Banks.
Up Bank was well ahead of 86 400 at 21st and Xinja at 27.
“COVID’s acceleration of digital technologies has enhanced the stakes for the digital banks,” said Mr Clover.
“The acceleration of digital offerings is likely to be a lasting impact of the crisis and only works in favour for many that have started to already move in this direction. Up Bank dominating over competitors on trust in this break-out category, in addition to the societal shift towards digital makes for a bright future.”
Trust in the banking industry as a whole scores just 8 points
It’s no secret that the banking industry isn’t Australia’s most trusted, and the Index quantifies this. The industry ranks banking 13th of 17 industries measured. Banking only tops social media, the media and Federal Government.
Trust in the big four banks in Australia is at or below the industry-wide average, which appears to significantly impact the overarching perception of the industry.
A concurrent report published from data captured over the same period in the UK shows that its banking industry ranks 4th from top in the industry trust leaderboard with a score of 24 points – a marked difference from the industry’s ranking in Australia.
Top 10 Trust Leaderboard
|10||Bank of Sydney||14||+1|