Roy Morgan found that the banks are facing “considerable leakage of their customers’ business” to each other, despite cross-selling activity receiving a slight boost.
The report found that on average the banks hold 32 per cent of their customers' financial products, an increase from 28.8 percent in 2010.
“While the big four banks have made some small gains in product cross-sell since 2010, overall they have not performed well,” Roy Morgan Research industry communications director Norman Morris said.
“It is clear from the analysis that there is plenty of scope for these banks to increase their business from their existing customers rather than chasing new ones.”
Roy Morgan found that 19 per cent of ANZ and NAB customers' products are held by other big four banks, compared with 15 per cent of Westpac's and 12 per cent of CBA Group's.
In addition, the report found that 19-21 per cent of products held by banking customers are from major insurance companies and between 24 and 27 per cent are from other institutions.
The report also made note that industry super funds in particular are now a major competitor with the banks in terms of their value, despite only holding 4 to 5 per cent of products held by customers in the major banks.
Mr Morris said the reasons why cross-selling has not improved more include a “lack of incentive for customers to consolidate, competition from specialist providers such as for superannuation and insurance, lack of product awareness, some concern regarding the spread of risk and staff that may not feel confident in a selling role”.
