Banks need to focus on rebuilding consumer confidence

14th Sep 2014

With trust in the spotlight and current account switching up 19% from last year, customer service in the banking and building society sector has continued to fall, according to the latest UK Customer Satisfaction Index (UKCSI) scores.

Banks and building societies finished seventh out of 13 in the overall index with a score of 77.7.

Although marginally outperforming the Insurance sector this year, it fell by 0.4 points compared to the all-sector fall of 0.8 and is now 1.4 points ahead of the all-sector average of 76.3. The consistent leaders in this sector, first direct (86.3), Nationwide (83.5) and the Co-operative Bank, were joined at the top of the index by Tesco Bank (82.7), which increased its score by 6.3 points, the second most improved organisation in the UK.While these organisations were amongst the best performing across all industries, half of the fourteen banking organisations included in UKCSI scored below the all sector average, with only four organisations improving their score by more than one point and three reporting a fall in their score by more than one point.

As one of the most consistent performers, first direct has been ranked first for all but one UKCSI. Nationwide has delivered sustained improvement in customer satisfaction improving its score by 7.1 points since July 2009 the third largest rise of any organisation during the period. While short-term improvements are an encouraging indicator of business performance, to consistently deliver this level of excellence demonstrates organisations are highly focused on the customer.

The sector performed well for professionalism of staff and problem solving, demonstrating the positive role of high street branches and accessible frontline staff that consistently deliver good service. Expectations were exceeded for 17 per cent of banking customers, while expectations were not met for 12 per cent.

Customers of banks and building societies are least likely to use social media to highlight complaints. The proportion of people using this channel of communication has trebled from 0.4 to 1.9 per cent since 2013, but is the lowest of all sectors.

Jo Causon, CEO of the Institute of Customer Service, comments:

"The banking and building society sector is amongst the most diverse in terms of performance. There are examples of long-term excellence, as in the cases of Nationwide and First Direct. Yet there are many organisations that are underperforming, putting the sector in the bottom half of the index. The increased loyalty and trust that good customer service brings is essential to a banking sector where account switching is becoming easier and more frequent. Nevertheless many banking organisations perform below the all sector average offering further scope for improved business performance through customer service.”

Causon added:

“With consumers more likely than ever to recommend on the basis of a good experience and share poor customer experiences with friends and colleagues, it is a critical time for the sector to make improvements in this area.”

The UKCSI, carried out by the Institute of Customer Service, includes over 40,000 responses from more than 9,000 customers. During these interviews customers gave insight into 197 of the UK’s leading brands across 13 different sectors. Of these, Banking ranked in 7th place, with a drop of 0.4 points between January and July 2014. The Banking & Building Societies sector includes over 3,000 customer responses.


Notes to editors

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About The Institute of Customer Service

The Institute of Customer Service is the professional body for customer service delivering tangible benefit to organisations and individuals so that our customers can improve their customers' experience and their own business performance. The Institute is a membership body with a community of over 400 organisational members - from the private, public and third sectors - and over 5,000 individual memberships.

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