40% Drop In Big 4 Banks’ Share Price, Are They Listening To What The Market Is Saying?

I was sitting in front of the computer on 10am Saturday, trying to open up a new bank account online with one of the Big 4 Banks. It was the first 25 degree day for Sydney after many weeks of grizzly winter weather. I wanted to be at the beach, like all of Sydney was but I needed to get this done.

I wanted to open a new bank account, for a new business, Maven Data, Australia’s first AI-powered market research agency (yes it is a plug).

But apparently opening up a bank account online is not simple. It took multiple attempts over multiple days, and the computer repeatedly said no – “System failure, please try again later or call 13 xx xx”. So I grumbled at the computer; surprisingly it didn’t respond.

Then I spoke to the site’s chatbot which directed me yet again to the same page with ‘system failure’. The computer won again and was met with a loud grouch.

Then I succumbed to calling the general hotline and waited impatiently for 45 minutes on hold. Just as I was about to give up, a lovely human voice said hello! I spoke to this real human who was very empathetic to my frustrations. Yay! Then she asked me my security questions and I failed because there was something wrong with my customer ID. The computer said no, again.

So I got annoyed, super annoyed. Puffs of steam were billowing out of my ears. Two big banks had failed me in 2 weeks by not giving me what I wanted. NOT. HAPPY. JAN.

And I exploded into a tirade of abuse at the poor voice on the phone.

“This is why big banks are failing!
Your processes are so archaic!
I run a business and don’t have time for this!
I can open an account online with other banks in 60 seconds!
You missed the mark on digital transformation 10 years ago!”

Then I realised this voice was just on the front line who didn’t make decisions, just followed the process.

So I apologised.

The lovely voice was very gracious and said she “completely understood my frustration and would “pass on this feedback to her supervisor”.

She asked me to call the general hotline again because this “process did not allow for this issue to be fixed over the phone on this call”.

So defeated, deeply frustrated yet determined to find another bank…I sought help from Uncle Google. Within 0.00000012 seconds on chrome, I found a non-big 4 bank, opened up a new account online in 60 seconds. Faster than two-minute noodles. Relief.

But this feeling of frustration still lingered. My brain was still on high alert. Ahhh ahhh ahhh!

And I become super curious about one thing – “How does this single experience impact the big banks in the future”.

Good question. So what does a curious data maven do with a burning question – hunt down the answer through data. Coding gloves on…here we go. It’s just you (computer) and me in the ring and THIS time you will NOT say no to me.

After 90 minutes of analysis, I found the story.

Here it is. THIS is why big banks are failing.


Start with a few market indicators, share price – what do financial markets say? 

Here’s the share price of the Big 4 banks and the ASX200 ex real estate investment trusts (the market index) over the last 2 years:

Share Price drop for Big 4 Banks Jan 2018 to August 2020

This is ugly. Three of the Big 4 banks dropped off a cliff ~40%. Can you imagine if you invested $1 million to buy a shoebox in Sydney 2 years ago, to find that it’s now worth $600K? Not happy Jan! Now, to be fair, the ASX200 (proxy for the market) also tanked in March 2020 but the drop over the same period was only 10%, similar to CBA.

Okay, so why did CBA drop by ‘just’ 14%. Still bad but not as bad as the other 3.

Put simply:

The share price is an estimate of future value, which is underpinned by an estimate of future cash flows, which – for a bank – is underpinned by how much they lend, which is supported by how much cash they have (ie. deposits from you and me). So no deposits = no ability to turn our money into their money.

So back to my frustrations in not being able to open up a bank account online. I could not offer my money to said Big 4 Bank (so they could multiply my money into their profits in return for 0.00001% interest and the privilege of 5 free transactions per month at a fee of $10 per month – what a great customer experience!)…these banks are clearly out of touch.

Remember how it took me over 2 weeks to not open up a new bank account because their systems and processes could not make it happen, in 2020?

Big 4 Banks know this. The market knows this. But they clearly haven’t been listening to the market. They are tone deaf to the screams of the market, and on the phone this morning.

This online banking experience is best articulated in an acrostic poem.

H.ard of hearing
T.echnologically archaic

Yes, it was S.H.I.T.

I can’t be the only customer with the joy of this S.H.I.T. experience. What did other people say?


What did customers say?

I searched Uncle Google and Productreviews.com.au provided reviews for ‘online banking’:

Ugly again. Big 4 rated below 2 out of 5 (with CBA the best of the worst). Funny, Canstar rated CBA as the best bank. Hmmmmmm other people’s opinions again. Is that the view of the wider market?

I did a quick sense check…are reviewers inherently negative? 

Reviews make up a small sample of people’s opinions. People are biased.
When people are emotional, they tend to dramatise the pain. We react more to pain than gain.

In 2006 I published my university honours thesis about the impact of S&P credit rating revisions on Australian stock returns and it was no surprise that the market only reacted to downgrades, not upgrades. This human behaviour does not change.

So back to the question, were there ANY positive reviews about online banking?

Yes, Bank Australia rated 4.3 out of 5 (a customer-owned bank, not listed, established in 1957 and rebranded in 2015). Pity, it’s not listed because I suspect they would have performed better than the Big 4.

Interestingly, Bank Australia had undertaken a rebrand 5 years ago. During their re-birth, they would have assessed what customers wanted in a bank. It seems to be working well for them, based on the sample of customer 839 reviews. Still, small sample, but I confirmed that not all reviews are negative.

According to Nielsen in 2018, 2.5 million Australians were looking to switch their main financial institution in the next 6 months. 

Oooh, wouldn’t that just make any board nervous, if they cared?

Okay, so now I had evidence that at the grassroots level, banks that made customers UNhappy suffered consequences in the market through brand and share price. Again, not magic here.


What does the wider market say through AI?

Next, to remove the review bias, I wanted to know what the wider market felt, the millions of people who were engaging in online content in their natural environment. Without asking a person a single question, I used AI to analyse petabytes of web content around ‘online banking’.

I wanted to know:

  • What were the emotions and narratives around ‘online banking’ and ‘Big 4’ brands that were deeply engaging?
  • How intense were these emotions?
  • Am I part of a small cohort (4338 reviewers) that shared a S.H.I.T. experience?

Here’s what Aunty AI said, with an emotion wheel – one of my favourite diagnostics that accurately measures market emotions.

“Online banking” has an overall intensely positive emotion and ‘Timeless’ classification, meaning that it is deeply relevant in our lives and brings us feelings of ‘calmness’, ‘tranquillity’ and ‘easiness’, when done right.

That’s what we want from a bank right? This also says that if banks don’t satisfy this market need, the market will revolt, as we can see with the reviews and share price. We deeply care about online banking working! It’s not a nice to have. It’s 2020!

So Big 4, are you listening?

Okay, what does Aunty AI say about “Commbank online banking”, which according to the reviews and share price, should receive a better response from the market?

Aunty AI said Commbank is classified as Transformational, one of the 4 classifications of engagement measuring “does the market really care?”. Only 2% of narratives are transformational. 93% of narratives are Transient or Tribal, meaning ‘noise’ and the market doesn’t care. 5% of narratives are timeless, which signals it is relevant and part of society and what matters to people – they care.

This tells me that Commbank online banking, in addition to being deeply engaging and relevant to the market, has momentum with the potential to change behaviour and transform the world. What the market loves are elements of the Commbank product suite online. This insight makes sense to me. They were the first of the Big 4 to go digital over 15 years ago. They produced the Albert paywave terminal for small businesses (the thing that beeps your credit card and then prints a receipt – seems like normal now but when it first came out it was WOW).

Commbank is transformational. Good job. At Commbank, they certainly CAN.

Lastly, I analysed one of the other big banks, “ANZ online banking”, one that did not fare well in reviews or share price.

AI results are not good. ANZ online banking is “Transient” meaning the market doesn’t care and is not engaging.

Transient is considered noise. This is not a good sign because I notice a lot of TV advertising on ANZ but according to the market, they are not engaging with their online banking.

I can attest to that (Full disclosure: I am moving out of ANZ after 4 years of S.H.I.T. experience).

So the story from this market data is very clear. This S.H.I.T. needs to be addressed.

Are these big banks too big to fail?

Main image credit: Graphic design by Alistair Kroie ABC News and Maven Data

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