First Direct first for customer service, but customer satisfaction with banking sector remains muted

April 15, 2013 - PRLog -- Despite intense scrutiny, scandal and lack of consumer trust in financial services, First Direct has bucked the trend to land 3rd place overall for customer service, according to the UK’s most respected customer satisfaction research.

First Direct is bested in the all-industry rankings only by ASOS (in pole position for the first time) and John Lewis, placing it above Waitrose and Amazon.

First Direct has delivered consistent upward performance, increasing its lead on the competition and rising from 22nd place overall in the first half of 2011. The Co-operative Bank has also made a vast improvement over the last two years, moving from 67th position to 11th and overtaking Nationwide (currently 22nd) and HSBC (74th in the latest results).

The research is based on the findings of the bi-annual UK Customer Satisfaction Index (UKCSI), the national measure of customer satisfaction by the Institute of Customer Service. The Index gauges the quality of UK customer service through 26,000 consumer responses each year.

Chief Executive of the Institute of Customer Service, Jo Causon, comments: “Despite the liquidity, regulatory and trust issues financial institutions are facing, First Direct and The Co-operative bank have demonstrated that it is possible to deliver consistent improvement in satisfaction levels.

“Despite these successes, the satisfaction gap between the best and worst performers is considerable. If they are to consistently raise standards, banks must look to top performers, both in and beyond the banking sector, as examples of best practice, and identify how they can adapt to changes in the sector to improve the experience they offer their customers.”

Banking Sector Lags Behind

In general, customer satisfaction with banks has tentatively improved since 2011, rising from 76.3 out of 100 to 77.4 in 2012, and 78 in 2013. Yet, banking still performs poorly compared to many other industries.

Of the thirteen sectors included in the UKCSI, banking is an average performer in terms of its overall customer satisfaction score.

Since 2011, the banking sector has consistently ranked in eighth place, below food retail, non-food retail, services, automotive, leisure, tourism and insurance.  

Yet, many aspects of banks’ customer service are improving, including problem solving, which has risen from 74.5 in 2011 to 77.1 in 2013 and timeliness which has increased from 73.6 to 77.3 in the same period. Quality and efficiency has also improved rising from 75.3 to 77.7.

Advocacy Solution to Banking Trust

The research also reveals a clear correlation between service performance and customer recommendation in the retail banking sector. On average, an increase of one point to a bank’s Index score equates to an additional 1.6% of customers recommending the institution.

The top three performers in the UKCSI are the most likely to be endorsed by their customers: more than half (51%) of First Direct customers have recommended their bank, for example.

At the other end of the scale, the lowest-ranked bank on the UKCSI, Tesco (70.3), can count only 17% of its customers as advocates of its service.

Jo Causon recommends: “The evidence suggests that despite the regulatory and reputation issues surrounding the banking industry, consumers are highly influenced by the experiences they personally receive when they interact with banks. Customers grant loyalty and advocacy to providers that deliver excellent service. Those banks that genuinely create a banking experience that is easy, jargon free and transparent are more likely to attract and retain customers, which will ultimately have a positive effect on their bottom line.”

Ends

Further information

To read the full report, please contact Man Bites Dog.