Westpac still leads business banking satisfaction ratings, but smaller lender still in front

Westpac remains the most popular big-four bank among business customers, according to a new survey, although they remain well behind smaller lenders including Bendigo & Adelaide Bank and Macquarie Bank.

Westpac and NAB clocked up increases in customer satisfaction last month, but satisfaction levels among ANZ Banking Group and Commonwealth Bank of Australia customers remained flat for a third month running, says market research firm DBM.

DBM’s business financial services monitor, which looks at the banks’ performance across all business markets, shows Westpac was the big-four market leader in customer satisfaction for the six months to February, recording an average rating of 7.2 out of 10, with 10 meaning ‘extremely satisfied’.

From September 2010 until February 2011, ANZ came in second with an average whole-of-market customer satisfaction rating of 7. Commonwealth Bank of Australia was next at 6.9, and NAB finished off the list at 6.8.

“They’re moderately good scores, but a fair way down from a 10,” DBM managing director Dhruba Gupta told SmartCompany, giving the big four a ‘B’ for their results.

Gupta points out that smaller lenders such as Bendigo & Adelaide Bank, RaboBank and Macquarie Bank have outperformed the big lenders, receiving scores of 8 and above.

He adds the big four might have improved after the recent PR disasters of mortgage rate hikes exceeding lifts in the official cash rate and technical glitches, although most business lenders have “hardly felt the pinch” from mortgage rate rises over the past 12 months.

For the all-important micro lending sector – businesses with annual turnover of less than $1 million, which cover 89% of the survey – NAB lagged behind the pack in the six months, with a satisfaction level of 6.7, versus big-four leader Westpac at 7.2.

In the small business section, looking at revenue between $1 million and $5 million, Westpac again came out in front, with a satisfaction score of 7.4. NAB was weakest at 6.7.

In the medium-sized business section, market-leader Westpac increased its customer satisfaction score by 1 percentage point to 7.5, and CommBank also jumped 0.3 percentage points to 7.3. NAB’s customer satisfied levels soared 0.5 percentage points to 7.2, while ANZ went against trend by recording a 0.2 percentage point drop to 6.8.

Gupta said Westpac had been “moving ahead”, despite the difficulties of differentiating itself from the other big banks, because it’s seen to deliver on its promises, and improvements in the bank are more discernible for customers.

So what are the key drivers of customer satisfaction when it comes to business banking? According to Gupta, it’s all about service.

With the big four holding more than 80% market share, and offering similar products at similar prices, things like returning people’s calls, matching bankers with the right clients and giving employees the authority to act can make a difference to satisfaction ratings.