Latest Research: Customer Satisfaction in the UK’s Banking Sector

Which banks are getting it right, and find out how to create a great customer experience

The Banking Crisis may be over but the Consumer Crisis still rages on. What are the leading causes of frustration, and what can banking providers do to turn this around?'

Download the full report >

During the three months to October 2019 customer satisfaction in banking has declined, with the all too common issue of “resolving current account problems” cited as the leading cause of dissatisfaction. As expected, this has resulted in customers being less likely to recommend the companies and a reduction in re-purchase.

Our research highlights the need for banks to evolve with the changing needs and higher expectations of their customers. Perhaps a shining light in all this is that our survey showed that the change in customer feeling is not significant. Small but impactful improvements to core customer processes and staff training will ensure a consistent customer experience.

Perhaps unsurprisingly, our results also show that the amount of effort banking customers are having to exert to achieve their desired outcome also increased. Despite this rise, the sector's customer effort rating is still better than the average for the country across major sectors, and is only marginally higher than supermarkets and retailers - renowned for crafting low-effort experiences.

Creating a fast, frictionless customer experience is highly desirable and critical for generating customer loyalty. While many banking companies have introduced online chat and self-service transactions to support this, customers still expect to be able to speak to a customer agent quickly if they encounter a problem or want to swap from digital to human interaction.

It’s no great surprise then that given the decrease in customer satisfaction, we discovered that customers are less likely to recommend their banking provider to others. But while recommendation ratings dropped over time, they were still better than the cross-sector average. Topping the list is online retail, indicating consumers’ approval and advocacy for companies providing a seamless, low-effort, Amazon-like buying experience.

Another key metric impacted by high effort and low satisfaction is a customer's propensity to re-use or re-purchase from an organisation again. Companies rely heavily on customer retention, and it is a reliable indicator of the health and longevity of a business. The drop in satisfaction with banking providers and increase in customer effort is evident in our re-purchase results which show customers likeliness to re-use their bank fall over the study period.

Which banks are getting it right?

Our benchmarking results reveal the individual banks with the highest customer satisfaction scores are:

• First Direct
• Nationwide
• American Express

One area that organisations struggle with across all sectors is improving call centre waiting times. While many have introduced IVR (Interactive Voice Response) technology to reduce costs and waiting times, customers recognise that IVR is a queue management system rather than a fix for shortening hold times.

Customer comments relating to their banking providers IVR included frustrations such as:

• No menu
• Wanting it to be easier to contact the provider by telephone
• Desiring a shorter wait time

When asked what their ideal customer service would look like, banking customers comments included:

• Immediate contact on the phone rather than pressing a dozen buttons
• Easy and quick to contact
• Operator is quick to understand problem and a solution offered / fixed the first time

Our data also shows that these are best performing banks in relation to customer effort, in other words, the ease with which customers can fulfil relevant tasks:

• First Direct
• Nationwide
• Santander

These low customer effort scores were driven primarily by 'current account management' and 'staff taking the time to talk to customers'.

The Million Dollar Question - What makes customers happy?

• Managing my current account drives the highest customer satisfaction.
• Switching bank accounts occupies the middle satisfaction ground. 
• Resolving current account problems received the lowest satisfaction score.

Customer satisfaction with switching accounts increased only slightly in the six-month survey period, indicating there is currently little differentiation between banks’ approaches to this service. As account switching typically follows a set process, our research suggests that getting this right and making switching as simple and stress free as possible for customers can set new ground for creating stronger customer loyalty and recommendation.

What drives customer effort in banking?

The bank service customers see as requiring the least customer effort is ‘managing my current account’. Switching bank accounts is also perceived neutrally, as neither a high or low effort transaction. The service customers perceive as needing the most effort is ‘resolving current account problems'.

Banks keen to reduce customer churn should ideally explore and focus resources on resolving customer issues quickly and effectively first time.

Put simply they want to talk to a real person, be listened to and have their problem dealt with as quickly and effortlessly as possible. Technology cannot make up for human interaction.

Now, start improving your customer experience

Providing a great customer experience (CX) is crucial for all companies, but particularly for organisations in the fiercely competitive financial sector.

To remain competitive, generate profit and differentiate from competitor services, financial organisations must start filling the gaps between what customers’ expect and the service reality.

1. Acquire customer feedback across all touchpoints and  channels
2. Reduce customer effort
3. Gather real-time customer insights
4. Make employee engagement part of your customer  experience strategy
5. Start competitive benchmarking

We go into detail about how each of these strategies work together to improve your banking customers’ experience. Download the report and turn to page 16.

Are you ready to find out what your clients really think of your business? We can help and advise you on strategies to improve your business and get ahead of the competition. Contact me here on Linkedin or via our website: www.tti-global-research.co.uk