Finnish Banks 2006 according to the EPSI Rating Customer Satisfaction Study

• Finland has broken its seven year up going trend in private customer satisfaction

• Sampo Bank has increased its satisfaction significantly

• Banks treat their corporate customers better than private customers

• Handelsbanken still in the top among the larger corporate banks

• Customer optimism differs among the banks

• Finish customers are still more satisfied than their counterparts in other Nordic countries

These are some of the results from the latest EPSI Rating study concerning banks in Finland. The same study was also conducted in the other Nordic and in all the Baltic countries. The interviews were done in August - September 2006.

In the EPSI study, customer satisfaction index is the most central measurement. It can take values between 0 and 100 where 100 means that all customers are very satisfied. However, other measurements are included as well. These are known as important drivers and consist of company images, customer expectations, product and service quality, value for money. These drivers together with customer satisfaction result in customer loyalty. The retail banking market has been examined since 1999 and in 2006 is the second time where also the corporate market has been under examination.

Finnish Banks´ corporate customers´ satisfaction increased from last year

Finnish corporate customers´ satisfaction with their banks increased from last year by 0,6 points, and is now 77,3 (on scale 0-100). The results concerning corporate customers' satisfaction with different banks are presented below.

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The best satisfaction scores are given by the customers of the group "Other" banks, which includes, for example, such banks as Savings Banks and Local Co-operative Banks. Typical for these is that they mainly act locally or concentrate on special customer segments. Note that corporate customer opinions contain mostly opinions from small and medium sized companies.

Among the larger corporate banks, the best scores were given to Handelsbanken. However, Sampo has increased its corporate customer satisfaction index most, by 2,6 index points. The reason for Sampo's improvement is twofold. First, the bank has improved substantially in image and this, together with higher level of perceived product and service quality, has yield a higher level of customer satisfaction.

Private customers are not as satisfied as corporate customers

In Finland, private customers' satisfaction with their banks has increased consistently from 1999. But now, for the first time since 1999, private customers´ satisfaction was lower than previous year. This year, the Finnish private customers gave their banks an average customer satisfaction index 74,9. However, it still is considerably higher than in year 1999, when it was as low as 70,7. The trends by bank are displayed below.

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The ranking order of the banks in the private customer segment is similar to the order for the banks in the business customer segment, except that, in the private customer segment, Nordea ranks above Sampo Bank.

In private customer segment, it is worth mentioning that Sampo Bank was the only bank, who increased its private customers´ satisfaction index. All the other Finnish banks received lower scores than last year from their private customers.

Finnish banks treat generally their corporate customers better than their private customers.

To be able to compare customer satisfaction of private and corporate customers within each bank, the next table was done.

Handelsbanken is the only bank in Finland whose private customers are slightly more happy (+0,9) than its corporate customers. In all the other banks, the corporate customers are more satisfied than private customers. It seems that Finnish banks treat generally their corporate customers better than their private customers.

Noteworthy for Sampo Bank is that Sampo Bank's business customers are significantly more satisfied (+7,3) than its private customers are.

Two thirds of private customers use Internet

Over 68 per cent of the Finnish private customers say they usually use Internet in contacting their bank. The share of Internet users is highest in Handelsbanken. Totally 91,2 % of its customers say they usually contact the bank by Internet. In Sampo the share of Internet users is 70,8 % , in Nordea 63,6 %, and in Op-group the lowest 55,4 %.

Those customers, who prefer Internet in contacting their bank, give usually 2,5 index points lower scores in satisfaction and 3,5 points lower scores in loyalty for their bank than the other customers. Interestingly, the Internet users do not differ from the other customers in their evaluations on the bank's product or service quality.

Great differences in handling of customer complaints

In total, 12 per cent of all private customers of the Finnish banks responded that they have had one or more reasons to complain to their bank during the last year. However, 41 % of those did not bother to complain.

Treatment of complaints varied considerably among the banks. The scores of complaint handling ranged from 1 (extremely poor) to 10 (extremely well). Among the banks, the scores for their complaint handling, varied from Handelsbanken's 8,6 to Sampo's 6,3.

With poor complaint handling, a bank tends to lose customers to other banks. However, with good handling of complaints, the customers may become very loyal to the bank, even more so than before.

Nearly half of the private customers do not see any other alternative for their current bank

Nearly two thirds of the private customers (62,7 %) use only one bank and have concentrated all their bank affairs in one bank. And nearly half (42,4 %) of the Finnish private customers do not see any other alternative bank for their current bank. Of the larger banks, the customers of Op-group are the most loyal in this aspect.

Among different banking services, good scores are given to every bank about taking care of customers´ daily transactions, savings, and loans. But lower scores are given for taking care of the customers´ financial investments.

Overall, women seem to be on average 2,6 index points more satisfied with their banks than men. Further, people in rural areas tend to be more satisfied than people in the urban areas. Customers in Helsinki Tampere and Turku areas give, on average, 5,6 index points lower satisfaction scores for their banks than customers in the most rural areas.

Customer optimism differs among the banks

Private customers' satisfaction with their bank and their general optimism seem to be related. Those customers, who see that the economic situation in Finland will be better in future, seem also to be more satisfied with their bank than those customers, who see the national economic situation more pessimistically. Customer satisfaction was even more strongly associated with the personal future optimism. Those customers, who saw their personal financial position to change better during the coming year, were also more satisfied with their bank than their pessimistic counterparts.

It seems that there are no differences between the banks in their customers' optimism concerning the Finnish national economy. But, concerning the customers' own personal economy, Handelsbanken seems to have more optimistic private customers than the other banks. 

Customer Satisfaction in the Nordic Countries

The banking sector is also examined in the other Nordic countries and in the Baltic States. The customer satisfaction in the Finland compared to the other countries in both private and corporate market is presented below. Private banking customers in Finland, together with Latvia and Lithuania, have the most satisfied customers. It is also noted that both Finland and Norway has broken the up going trend.

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Corporate customers are now more satisfied than last year in both Sweden and Finland. In general Finish banking customer are more satisfied than customers in other countries. The reason can be traced to the customer expectation and the perceived product and service quality. In Finland, the bank delivers what their customers expects to a much larger extent than in for example Sweden. It is known that this gap (which should be as small as possible) is very important to obtain satisfied customers.

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The EPSI study

The data for the research was gathered by telephone interviews. The respondents were asked to evaluate the bank they primarily use. The respondents were selected by randomization procedures to participate to the research. Totally 250 respondents we interviewed from each major bank.

This research is part of European Customer Satisfaction Research, EPSI Rating. It is coordinated by the Swedish Institute of Quality and the Stockholm School of Economics. European quality organizations are also backing the research.

In Sweden, the same methodology has been in use since the year 1984, and it already covers a major portion of the Swedish economy. In Finland as well, it is the intention to gradually expand the research to cover the Finnish economy. In a few weeks, the results from telecom operators will be released. After that, studies on insurance companies, supermarket chains, "do-it-yourself" chains, and electricity companies will be released. The research is coordinated in Finland by Dr. Juhani Kuokkanen.

For additional information, please contact:

Dr. Juhani Kuokkanen phone: +358 40 5093401, e-mail: juhani.kuokkanen@epsi-rating.org
Professor Jan Eklöf  phone: +46 7069 64185, e-mail: jan.eklof@epsi-rating.com
Dr. Johan Parmler phone: Tel.: +46 8736 92 47, e-mail: johan.parmler@epsi-rating.com