Kiwis hunting for insurance and bank bargains

Feeling slighted for unrequited loyalty to their main bank or insurer, most Kiwis shop actively for better deals from competing providers, according to a new survey from Ernst & Young.

The research showed 81 per cent of New Zealanders believe their financial services provider knows that they are subscribed to multiple products, but only 30 per cent feel rewarded for that loyalty.

More than 9,000 retail banking and general insurance customers in the Asia Pacific region(Australia, China, Hong Kong, New Zealand and Singapore) were involved in the research, which found customers in both sectors feel unappreciated, unrecognised and under rewarded by their main provider.

The survey indicated 47 per cent of customers have more than one product outside of their main bank, and 55 per cent outside of their main insurer.

They are also increasingly shopping around for a better deal for new products rather than sticking with their main provider.

Ernst & Young banking partner Chris de Wit said the results from some 800 Kiwi respondents were largely consistent with the region "but Kiwis showed more definite preferences in bank loyalty and service preference."

Some 87 per cent of Kiwis have two or more products with their bank - one of the highest penetration rates in the region.

Some 60 per cent have maintained their relationship with their main bank for more than 10 years - but only 36 per cent would recommend their main bank to a friend or colleague, results showed.

De Wit said Kiwis tend to want to concentrate their products through their main bank but feel they are not rewarded for loyalty.

Despite their dissatisfaction, he said customers are "being restrained by inertia and apathy" and few are planning to change their main bank.

But De Wit thinks that could change.

"As technology changes and customers move more towards faceless contact with their main bank, the customer apathy demonstrated through this survey could result in increased customer churn.

"Churn ultimately represents a risk and an opportunity for banks - depending on how they respond in terms of their customer service and product propositions.

"There will come a point when the customers see that making the effort to switch providers is worthwhile, especially if banks enrich the reasons for making the switch," he said

When it comes to relationships with their bank providers, the two things Kiwis value most are trust and online banking. Drivers to make them change banks are fees, products/services on offer and interest rates.

- © Fairfax NZ News