Customer Service and Financial Services

25th Oct 2016


Minutes of the meeting of All Party Parliamentary Group on Customer Service - 5-6pm, Tuesday 25 October 2016


Philip Davies MP
Amanda Milling MP
Yvonne Fovargue MP
Peter Dowd MP
Jo Causon – The Institute of Customer Service 
Jonathan Davidson – Financial Conduct Authority 
Barry Watts - Financial Conduct Authority 
Eric Leenders – British Bankers Association
Colin Garland – Competition and Markets Authority 
Chris Larmer – Barclays Bank
Tamara Dewhirst – TSB Bank
Rachel Curtis-Brown - Cambridge & Counties Bank
Richard Bassford – Co-operative Bank
Tabitha Roberts – Handelsbanken
Mandy Griffen – Nationwide Building Society
Brodie Sinclair – Santander
Neal Southwick – Macmillan Cancer Support


Philip Davies MP opened the meeting by welcoming everyone and explaining briefly about the work of the APPG. He then invited everyone to introduce themselves.

Jo Causon (JC) opened her introductory remarks by stating that the banking and financial services sector was the only sector not to have registered an improvement in customer satisfaction in the last 12 months. This is according to the UK Customer Satisfaction Index (UKCSI) which surveys 10,000 consumers every 6 months and provides insights into the state and direction of customer satisfaction at a national level, across 13 key sectors and for individual organisations. 

JC proceeded to take the meeting through the findings of the latest UKCSI, pointing out that while there were undoubtedly good performances banking is now 7th out of 13 sectors. It should be a major worry, for example, that whilst 10% of consumers report having a problem with their bank only 23% complain about it. The principal reason for not doing so being that they did not think it would make a difference. The Index shows banks should focus on getting things right the first time as this is shown to make a significant difference to satisfaction levels.

Two very important lessons she draw the meetings attention to were: 1) the link between good customer service and improving levels of trust, and 2) the link between banks’ customer service and net gains and losses in terms of current accounts. It was important, therefore, that banks focus on service not just for their customer’s sake and for reputational reasons but also because it affects their bottom line.

PD asked Nationwide why they came top in the UKCSI data?

Mandy Griffen (MG) from Nationwide explained that as an organisation they have a long-term commitment to their branch network, with 80% of their customers still using branches even though many have internet banking services. MG also explained the importance of good training and ensuring that customer service is at the heart of this. 

After being asked by PD why Barclays was near the bottom of the list, Chris Larmer said it was important to better understand the needs of customers and ensure this was woven into complaint handling processes. Barclays had and continues to do a lot of work in this area and recognises that customer expectations have risen and the bank needed to respond to that.

For the FCA, Jonathan Davidson, said customer service was vital and is relevant to competition. While consumer protection and trust are vital in and of themselves, these factors can, if negative, affect bank performance and undermine their operational viability, a matter of major concern to regulators. Also, Davidson made the point that customers judge a bank by the way their staff behave in branches or over the phone, not on the basis of reports, statistics or logos. He stated the solution to these issues must be a cultural one. 

From the British Bankers Association, Eric Leenders, said that ratings for customer service will vary dramatically depending on the type of interactions people have and that customer service needs to be ‘channel agnostic.’ He noted that headline figures for customer satisfaction can be misleading as they simply allow consumers to show disapproval for ‘bad banks.’ Therefore, it is necessary for banks to adopt a “basket of measures” to examine the key drivers of customer service and not become fixated on only one or two parts of the bank’s operations. JC note that the UKCSI is just that sort of basket of measures and covers over 30 metrics looking at all channels. 

JC emphasised the importance for companies of ensuring that their staff know their products and services and are empowered to deal with issues in a timely manner. She noted that of the top 20 priorities for customers in the UKCSI, price was not top of the list – the top 5 all related to quality and helpfulness of the company’s staff and their responses. 

Yvonne Fovargue MP cited a Which? report which claimed that data security was not being taken seriously enough and referenced TalkTalk as an example of what can happen to a firm when things go wrong.

JC explained that it was vital that companies managed and stored data securely not least because if companies are to be able to offer their customers a more personalised service, which customers are demanding, they need more data. But customers won’t provide this if they don’t trust the firm. She continued that there was a strong relationship between customer satisfaction and trust as demonstrated by the UKCSI data

PD broadened out the discussion to include the role of challenger banks and to bring in Colin Garland from the CMA.

Gardland said from their investigations it was clear that people do not differentiate between different banks based on their ratings and that banks were not working hard enough to benefit their customers. The CMA has put forward a package of possible remedies and believes that switching levels are too low and that their package will help to improve this. 

APPG Vice Chair Amanda Milling MP asked whether there is enough product innovation. The CMA noted that there is more than there used to be in terms of products but in terms of service improvements, whilst there were changes such as internet banking, there is much more to do and this is being led by the work on current accounts. 

Peter Dowd MP asked a question about whether the findings of the UKCSI differ between different gender and age groups. 

JC explained that in general young people are the least satisfied with performance but otherwise there were no discernible differences.

For Nationwide, Mandy Griffen, stated that as a business they innovated to help their customers who get into trouble. This started with customers who contracted cancer and new services and responses were designed with the help of Macmillan Cancer Support. They have since widened this out to include other groups of people. Barclays said they have done the same for their customers.

The meeting agreed that banks needed to show empathy and understanding for people in difficult situations but that they had to provide innovative solutions as well if they are serious about helping.

Philip Davies then asked what is the role of leadership in improving customer service and how does one induce it?

From Handlesbanken, Tabitha Roberts said that culture is the key and is something they take very seriously. Everyone who works for the bank regards themselves as a “handlesbanker” and that they are there to serve their customers first and foremost and their organisation is shaped to reflect this. 

The FCA agreed culture is very important, ‘the root cause of everything,’ and highlighted 4 factors that are key: 1) the tone for the culture of an organisation is set by those at the top; 2) what sort of incentives has the bank put in place for their staff; 3) what does the bank’s narrative and corporate strategy say; and 4) what are the capabilities in an organisation and what are they doing to enhance these. Barclays agreed and made clear that empathy must be included in leadership training and role modelling in organisations. 

JC stated that if a company board is fully behind efforts to improve customer service then it increases the chances of it happening. She said that boards should take responsibly for, and be rewarded for the businesses performance, in customer service.

Eric Leenders from the BBA also noted the need to set auditable targets for service that can be measured against and that the banks can use as part of their existing compliance processes to drive change.

Continuing on the theme of leadership PD pointed out that the problem was that customers cannot speak to anyone in a senior position in a bank and as such executives and directors don’t hear from ordinary customers. 

Cambridge and Counties Bank explained that they require their directors to occasionally ring ordinary customers and answer their queries and they are doing more work to ensure the top leadership team understand what their customers are saying and require. JC agreed and said it was important for the Board to know what customers were complaining about and to listen to those customers on occasion. 

From the Co-Op Bank, Richard Bassford, explained that their new approach and focus on innovation has been driven by the CEO. He has empowered frontline staff to make common sense decisions to speed-up services and correct faults and problems. In addition, team leaders are required to make customer calls themselves and the results are fed across the whole of the bank so people know how the organisation is performing. 

Moving the focus to new entrants, JC said she saw new entrants to the banking sector as having a major impact and were increasing the pressure on traditional banks. 

The FCA said new entrants are good but there are questions around their data security, resilience and operational capabilities. Rachel Curtis-Bowen, from Cambridge and Counties Bank, said it was important not to look at this as traditional vs new entrants as people are increasingly willing to buy services from multiple providers. 

Eric Leenders from the BBA said that new technology and innovation has moved from being supply-led to demand-led and that the approach of people in organisations at all levels had to change from simply performing tasks to actually thinking about what is best to do. This has started but there is a long way to go and banks needed to focus on empowering staff.

PD then asked why Tesco’s was ranked lowest for customer service in the UKCSI when they prioritise customer service in their retail operations?

The FCA did not have a definitive answer but said that when Tesco launched their bank they used RBS for their banking provision. In addition, Nationwide said that one problem is the bank is totally separate from the retail stores, which is evidenced by the fact that you can’t go into a Tesco store and ask about their bank.


JC summarised the meeting saying more investment and focus needed to be put into customer service and that the banking and financial services sector should be ranked more highly, particularly given the importance of these services to individuals, businesses and the wider economy. The CMA agreed and said new technology, and the new services it will drive, will challenge banks to do this. 

PD thanked everyone for coming and closed the meeting.

Download: Minutes - APPG Customer Service Meeting - 25 October 2016 - Financial Services

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