Customers are unhappy with their banks, and for the first time in a decade not one New Zealand bank has done well enough to win Consumer NZ’s People’s Choice Award.
The verdict comes from Consumer NZ’s annual banking customer satisfaction survey, which ran online from 20 February to 23 March 2026 and gathered responses from 1,958 New Zealanders. To earn the People’s Choice tag a bank has to clear a set threshold of customer satisfaction across categories such as fees, value for money, response times and trust. In 2026 none of them did.
Consumer NZ chief executive Jon Duffy said everyday banking had simply stopped keeping pace with what customers expect. “Many customers don’t feel they’re getting fair value, especially when it comes to fees, interest rates, and how banks respond when something goes wrong,” Duffy said.
The headline grievance is profit. Forty three percent of survey respondents told Consumer NZ that bank profits in New Zealand are unacceptable, and lower income customers were the most likely to say so. The big four Australian owned banks pull in roughly seven billion dollars a year in combined profit, a number that has fed into a long running political argument over whether the sector is competitive enough.
Banking is supposed to be the kind of market where dissatisfied customers can vote with their feet, but Consumer NZ found the opposite. Only four percent of New Zealanders had switched banks in the past year, despite many of them saying they were unhappy. Duffy argued that if more people moved their accounts, banks would be forced to compete harder on price and service. “It’s consumer behaviour that helps encourage competition,” he said, pointing to open banking and faster payment systems as the structural changes that might finally unlock easier switching.
The 2026 result is especially harsh on Westpac. The bank ranked at the bottom of the survey on a long list of measures, including responsible lending, value for money, timely responses, fees and charges, phone banking, branch banking and overall customer satisfaction. Westpac New Zealand spokesperson Helen Ryder told RNZ the bank was working “extremely hard” to lift its game and that recent internal data showed improvements in branch satisfaction and contact centre wait times. The next survey will test whether any of that has flowed through.
Kiwibank, the state owned challenger that has spent the last decade selling itself as the local alternative to Australian banks, also slipped. Its trust score came in at 70 percent, below the 75 percent industry average. That is a notable result given that Kiwibank’s core marketing pitch has always rested on customer loyalty and a sense of being on the side of New Zealanders. Winston Peters spent the past fortnight floating a plan to merge BNZ with Kiwibank, and the new survey is the kind of data point that will be picked over in that debate.
The one bright spot was The Co-operative Bank, which led the survey on customer service. Duffy said small banks tended to do better in the rankings because of how they were structured. “Over the history of this award, it’s often the smaller banks that have done better than the larger banks, simply because they’re a bit scrappier – they’re actively trying to get your custom,” he said. The Co-operative Bank has built much of its public profile on being member owned and on paying a rebate to customers when it makes a profit, although its share of total mortgages and deposits remains small.
The picture from this year’s survey lines up with other recent signals from the banking system. The Commerce Commission’s 2024 personal banking market study concluded the sector lacked dynamic competition and recommended a faster open banking rollout, more support for Kiwibank as a disruptor, and an end to the practice of paying cashbacks to keep mortgage customers from shopping around. The Reserve Bank has separately flagged that net interest margins at the major New Zealand banks remain elevated compared with their Australian parent operations.
Consumers themselves are sending mixed signals. Inland Revenue data released this week shows KiwiSaver members took out 229.6 million dollars in early withdrawals in April, with 38.5 million dollars of that drawn down on financial hardship grounds across 4,410 separate withdrawals. Those are not bank profit numbers, but they do speak to the household pressure sitting under the bank satisfaction figures.
Duffy was careful to say that frustration alone will not change the system. The Consumer NZ survey suggests banks have very little to fear from any single customer because so few of them act on their dissatisfaction. Open banking, which lets customers connect their data to third party apps and providers, is supposed to make moving between providers as simple as porting a phone number. Adoption in New Zealand has been slow, but the regulatory framework is finally being put in place.
For now, the message from Consumer NZ to New Zealanders is that the cheapest way to get a better deal out of a bank is to ask for one, and to be ready to walk if the answer is no. The full results are published in the Consumer NZ customer satisfaction surveys hub, and the underlying figures were also covered by interest.co.nz.
Have you switched banks in the past year, or thought about it and decided to stay put? Tell us what tipped the decision in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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