To understand what the broker channel thinks of the big four banks, Momentum Intelligence, in partnership with The Adviser, asked brokers to have their say on the pillars of the banking industry. Annie Kane takes a look at some of the top findings from the Third-Party Lending Report: Major Banks.
The four pillars of the Australian banking system — the Australia and New Zealand Banking Group (ANZ), the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac — have taken a beating in the last year. From damning allegations of misconduct during the financial services royal commission to the Productivity Commission’s censorious report on competition in the country’s financial system, the foundations of the banking system have been well and truly shaken.
The major banks, which collectively account for approximately 75 per cent of the market (according to the PC), have also been forced to divulge their shortcomings before the royal commission. As credit policies tighten off the back of the royal commission and the banks’ shift in the way they lend, we wanted to know what brokers thought of the pillars of the banking industry and who they thought was still standing tall.
In this context, we present you with the exclusive findings from the Momentum Intelligence Third Party Lending Report: Major Banks, partnered by The Adviser.
Notably, the report shows that there is diminishing satisfaction with the major banks. The average attribute rating dropped from 3.87 in 2016 to 3.54 in 2017 and this year has hit a new low of 3.35. This marks a decrease of 13 per cent over the two-year period and includes a fall in the ratings for all four major categories: product, support, technology and commission.
When compared to this year’s ranking for the non-banks, the drop is even more apparent, given that brokers gave the non-bank lenders a rating of 3.88 per cent and have rated them more highly than the big four (and their non-major counterparts) for the past two years in a row.
The big four banks were also rated least favourably for the support they offer brokers, with the support category giving a rating of 3.19 and also seeing the biggest change on last year’s figures, with a fall of 6.45 per cent.
However, where the major banks score well is in the products they put out to market through the broker channel, with the product category rated the highest at 3.62. Despite this, though, this figure was still lower than last year’s survey, by just over 4 per cent.