Highlights of Commercial Banks' Customer Satisfaction Survey (2018)

Published: Wednesday April 18th, 2018

HIGHLIGHTS OF COMMERCIAL BANKS’ CUSTOMER SATISFACTION SURVEY (2018)

EXECUTIVE SUMMARY

BACKGROUND

This report summarises results of the Central Bank of The Bahamas’ survey on commercial bank fees and customer satisfaction feedback in relation to certain banking services. It is intended to provide a benchmark for more regular tracking of customer sentiment and to provide context to consumer education on bank fees. The analysis below provides high-level views of the results only. More complex review is also possible given the cross-section of demographic data collected and range of questions posed. 

Following input on the survey design from the Clearing Banks Association (CBA) the Central Bank engaged external support to have the survey administered randomly to 1,007 respondents. 

From a financial access point of view, this survey reveals that less than 5% of those in the surveyed population do not have access to any form of banking service. At a high level, most users of financial products expressed some understanding for why fees exist. However the ability to distinguish between direct government taxes and the institutions’ own charges is only possible for an estimated 42% of the banking public. In the meantime, the view is pervasive that, fees are too high, with the most common products singled out being those related to payments services (ATM use, check cashing, and deposits of cash & checks). Customer mobility or the perceived ease of switching between service providers is also considered to be unreasonably constraining for 8% of the banking population, given documentation requirement for services. Viewed alternatively, it is estimated that over 90% of the population has access to banking services and around 71% of respondents indicate some ease in switching between service providers. 

BANKING PRACTICES

• Surveyed banking clients have few accounts spread across a limited number of banking products.
• Online access appears to be a method of contact for banking activity for the majority of respondents.
• Younger respondents in the 18 to 34-year-old category were the most fluid in describing recent changes in their banking behaviour.
• When individuals disclosed use of more than a single bank, the services revealed as being received most often from the user’s non-primary bank appear to be credit (other than mortgages) such as chequing cashing and credit cards, loans.

ATTITUDES TOWARDS COSTS & SERVICES

• Sentiments around interest rates, fees, service delivery and access to credit for instance, are relatively balanced between men and women across age groups and income categories.
• Most respondents revealed that they were largely satisfied (about 60% of the total) with their experiences at their primary bank.

BANK FEES

• Based on survey feedback, respondents most commonly gauged bank fees being experienced at between $5-$19 per month, although in some cases the estimated amount was higher.
• Perceived value for service appears to be polarised.
• As to the reasonableness of charges, bank fees are considered to be too high, although the views do not fully align on the direction in which fees should be adjusted.
• By law, banks are required to give advance notice of fee changes on products, although awareness of when such change occurred, or whether such notifications were practiced was limited.

CONCLUSION

This survey provides a strong basis for interventions to improve consumer education around bank fee structure in The Bahamas. It also underscores scope for more effective practices around notification of fee changes and stronger mechanisms to allow consumers to compare fee across institutions. Scope also exists to reduce constraints, perceived or otherwise, on the ease of switching between financial institutions for products and services. Also concerns around the level of fees concentrated most on payments and transactional facilities where average costs require legitimate redress. The planned acceleration of the Central bank’s payments system modernisation initiative should begin to address these particular concerns. As the survey responses indicate, some portion of the public are still not within access to the banking services, notwithstanding. The rate of financial exclusion, however, is likely understated since undocumented persons are not well represented in the survey. Not discussed in detail above, but also evident from the survey results, the demographic divide between income and age groups also has to be factored in policy approaches to financial literacy and inclusion, with vulnerability evident in some cases for older customers of financial institutions, and in other cases more so for lower income households.