South: UKCSI singles out retail banks for poor customer service
The latest UK Customer Service Index (UKCSI), which has run every six months since January 2008 and which is built on interviews with 10,000 UK consumers, shows that customer service in the retail-banking sector has failed to improve over the past year, despite moves to increase competition and quality of service. The Index reveals that banking is the only sector of the economy which has failed to improve its rating for customer satisfaction since July 2015. On the contrary, banks and building societies have slipped down the sector rankings in the last year, dropping from fourth to seventh place.
The Index lists just four banks among the top-50 organisations for customer satisfaction. Nationwide is the highest scoring bank, in sixth place, closely followed by First Direct, which is the only bank that has consistently appeared in the top 50 of the organisational rankings since January 2011, in seventh. Other banks that make the top 50 are TSB in 25th place and the Cooperative Bank in 47th. Cooperative Bank is identified as one of the most improved organisations covered by the UKCSI, rising from 93rd place in July 2015.
Only two banks improved by more than two points from last year, with five banks receiving a lower score. 10% of customers said they have experienced a problem with their bank or building society in the past six months. The main reason, cited in 29% of complaints, was staff competence, followed by the quality and reliability of service (reported in 25% of cases) and staff attitude (reported in 21%).
Of those who made a complaint to their bank, 17% said it was dealt with immediately, but 30% said they were still waiting for their issue to be resolved at the time the research was carried out.
This latest UKCSI should set alarm bells ringing for banks. With the Competition and Markets Authority (CMA) set to make switching easier, The Institute of Customer Service is issuing a warning that banks who fail to improve their customer service may quickly lose customers as a result. Banks whose average customer satisfaction was higher than the sector average were more successful in gaining accounts, with 20,000 new accounts on average. Banks with lower than average customer satisfaction suffered an average loss of 9,663 customer accounts over the same period.
Jo Causon, CEO of The Institute of Customer Service, said: “It’s evident that the retail banking sector is resting on its laurels, safe in the knowledge that customers are unlikely to switch their accounts. Aside from public services, banking has the highest percentage of customers who have used the same service for more than 20 years, supporting the CMA’s assertion that the sector suffers from weak competitive pressures.”
He added: “The picture should be set to change, with the CMA due to release its final report into retail banking next month. Recommendations are expected to include proposals to make it easier for consumers to switch. Rather than view this as a problem, banks should see it as an opportunity.”
