According to a new report from Consumer NZ, nearly 40% of Kiwis say they don't trust banks, with trust in the country's big four banks plummeting.
Speaking to Breakfast this morning, Consumer NZ Chief Executive Jon Duffy said this is the biggest dip in trust they've seen in the two years they've run the survey.
"It's really fallen off a cliff," Duffy said.
With the RBNZ raising the Official Cash Rate, people are paying more in interest rates for mortgages alongside higher fees.
"But what we've noticed is sitting in behind that is a drop in the value that people feel they're getting from the services that banks provide them, and that's producing a disconnect," Duffy said.
He said people see the record profits big banks are reporting, some over $1 billion, while simultaneously observing a retreat from branch services and little investment in their communities.
It's the smaller banks that people are more happy with. The Co-operative Bank and TSB Bank topped Consumer NZ's survey at 86% and 78% satisfaction respectively, while New Zealand's largest bank, Westpac, scored the lowest at only 54%.
Duffy said the short-term solution is for people to become more comfortable with shopping around.
"There is a perception that it’s difficult to switch your personal banking away from the bank you’re on but actually people who do it report that it’s actually a lot easier than they thought it would be."
He also repeated calls, supported by all parties in Parliament except Labour, to institute a Commerce Commission market study into competition in the banking sector, similar to the inquiry into supermarkets.
Such a study would find out whether the big four banks — Westpac, ANZ, BNZ and ASB — which are also the four most profitable businesses in the country, are so dominant there's a lack of competitive tension.
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