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Australia’s four major banks are trailing smaller lenders in the eyes of Australians, according to a new survey ranking based on public trust.
The big four banks are among those considered least trustworthy, based on the latest quarterly Trust Index survey for March 2020.
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The index is a quarterly study undertaken by research platform Glow, which measures the level of trust that the 1,250 members of Australian public have in national banking institutions.
Notably, the study found Australia’s four biggest players in the banking industry to be trailing behind almost all other lenders.
Out of 31 lenders included in the rank, Westpac was ranked 29th, ahead of only AMP and the Bank of China, which are both in negative territory.
The other three majors were clustered together with NAB ranked at 22nd, Commonwealth Bank at 23rd and ANZ at 24th.
Despite their relatively low rankings, all four of the major banks have managed to improve their image of trustworthiness over the last quarter, with Westpac improving by five index points since the December ranking, NAB by four index points, ANZ by three points and Commonwealth Bank by one point.
Glow CEO Tim Clover said the fallout of the banking royal commission has seen the major banks take a hit in the eyes of the public. However, the response of the banking industry to the ongoing COVID-19 pandemic, including through the provision of loan relief, has helped recoup some of those losses.
“The big four 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,” Mr Clover said.
“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 four have increased their trust, but not as much as they perhaps would have liked.”
He continued: “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.”
Customer-owner bank Greater Bank took out the number one spot on the index for March, up from fourth place in the December index.
Meanwhile, the holder of the top spot for December, Bendigo Bank, slipped to fifth place in this study.
The March quarter index was the first to include the neobanks in its ranks, with Up Bank coming in as a strong contender, debuting at seventh place.
The Bendigo and Adelaide Bank-backed neobank did perform considerably better than other fintech banks, as 86 400 ranked at number 21, and Xinja came in at 27th, according to the study.
“COVID’s acceleration of digital technologies has enhanced the stakes for the digital banks,” Mr Clover said.
“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 breakout category, in addition to the societal shift towards digital, makes for a bright future.”
Glow noted that trust levels in the big four banks in Australia sit “at or below” the industry-wide average, which appears to “significantly impact the overarching perception” of the banking industry.
Overall, trust in the banking industry scored just 8 points on the trust index, with the industry as a whole ranking 13th out of 17 industries measured, beating out social media, mainstream media and the federal government.
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