Banking Bucks the Trend to Improve Customer Satisfaction in 2013 by Using Customer Service to Rebuild Lost Trust

• Banks and Building Societies the only sector to improve customer satisfaction during 2013
• ‘Professionalism’ and ‘problem solving’ metrics higher in this sector than any other
• First Direct has the highest customer satisfaction score in the sector – 86.6
• Satisfaction closely correlated to loyalty and recommendation
• 60 percent want a balance of good service at a reasonable cost
• Customer service identified as a key way of rebuilding trust

The Banking sector, despite dominating the headlines throughout 2013 for a litany of customer service crises, was revealed as the only sector to record an increase in customer satisfaction in the UK Customer Satisfaction Index (UKCSI), scoring 0.2 points higher than it did in 2012.

Jo Causon, CEO, Institute Of Customer Service

The research, carried out by the Institute of Customer Service, involved more than 12,000 interviews with consumers about their customer experiences. During these interviews customers gave insight into 181 of the UK’s leading brands across 13 different sectors. First Direct was awarded the best customer satisfaction score of 86.6 for the sector in 2013, followed by the Co-operative Bank (86.4) and Tesco Bank (83.0).

But despite the slight improvement in its score, banking and Building societies was only eighthbest sector for customer satisfaction and with an overall UKCSI score of 78.1, currently just one point above the average (77.1). It scored higher than the all-sector average for professionalism and problem solving, demonstrating how the skills of customer facing bank and building society staff are at the front line of the battle to improve the reputation of the sector.

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

“The banking sector has some way to go to regain customers’ trust, which has been eroded in recent years. Focusing on serving customer needs and improving the customer experience are tangible steps banks can make to rebuild trust.

“There are big differences in the satisfaction ratings of individual banks and building societies. Our research shows that the organisations that score highest in UKCSI achieve the highest levels of trust, customer retention and recommendations to others – very important aspects for a sector that expects customers to entrust it with their life savings and mortgages.

Eight organisations from the banking sector scored below 80 points, with Bank of Scotland receiving 74.2 points, the lowest score in the sector. Four organisations increased their score by more than one point, Halifax, Lloyds, Santander and relatively new entrant to the index, Tesco, whereas five registered a drop of more than one point.

For the first time since UKCSI began in 2008 each interview included questions about the balance of price and service. When asked whether they would prefer good customer service or a good price, 60 percent revealed they would not be prepared to sacrifice customer service for a better price and preferred there to be a balance of the two. Just under a quarter of people (24 percent) are looking specifically for excellent service and are prepared to pay a premium for it, leaving around 16 percent of people who would sacrifice service for a lower price.

More than three quarters of people who had a problem (76 percent) reported it to the organisation in question. Also, surprisingly considering the increase in the use of social media, only 0.4 percent of people contacting a bank or building society about a problem used social media, the lowest proportion of any sector, compared to 59 percent who did so via telephone. Satisfaction with the handling and final outcome of these complaints fell slightly between 2013 and 2014 to 4.9 out of 10 from 5.4.

Jo Causon adds:

“In an era of increasing regulation and competition in the banking sector, organisations which focus on building long-term relationships with their customers are well placed to achieve sustainable business success, which will benefit them and the economy as a whole.