Small Banks Have The Most Satisfied Customers

As the banks have reduced branch opening hours over the last 12 months and often employed fewer staff, dealing with customer complaints and queries has been a major challenge for them. But some have managed much better than others.

The latest analysis of feedback and complaints data carried out by consumer website Fairer Finance shows that well-known brands such as Halifax, HSBC, Nationwide and NatWest have struggled to meet customers’ expectations. In contrast, newcomer mobile bank Starling Bank, Cumberland Building Society and C Hoare & Co, the UK’s oldest privately owned bank, have continued to deliver excellent service. Meanwhile, others such as Bank of Ireland and Allied Irish Bank have shown improvement.

Fairer Finance has been compiling its ‘customer experience’ ratings for the past seven years. Customers, according to MD James Daley, have been ‘generally satisfied’ with their banks’ performance during the pandemic. Although he says experiences vary widely. In the case of some banks, he adds, the pandemic encouraged them to try new things, and they were surprised and pleased to discover what they were capable of.

On the other hand, Daley says, others proved to be badly underprepared and struggled to provide acceptable levels of customer service.

Complaints to FOS lower rating

The website’s ratings are determined using four criteria, two of which are based on consumer opinions and two on analysis of complaints data and the bank’s product literature, especially the terms and conditions.

The ‘more satisfied’ a bank’s customers, and the more they trust the bank brand, the higher the Fairer Finance rating awarded to a bank. In comparison, an increase in complaints to the Financial Ombudsman Service (FOS) which are then upheld will result in a lower rating. The same applies to products with confusing terms and conditions.

The average of the four scores provides the overall rating, with 100 being the highest. The latest scores range from 75% down to 51%.

The five banks rated the best are: Starling Bank (75%); Cumberland Building Society (75%); C Hoare & Co (75%); Bank of Ireland (72%); and Allied Irish Bank (72%). The five rated the worst are: Yorkshire Bank (56%); Citibank (56%); Clydesdale (56%); Royal Bank of Scotland (55%); and Ulster Bank (51%).

Daley says the ratings are important because choosing a bank with a good reputation for service is crucial when customers may stay with a bank for many years.

Customer service a priority

Martyn James, Head of Media at complaints resolution company Resolver, is not surprised that Starling Bank comes out top of the customer experience charts. He says the difference between Starling Bank and other start-up banks and high street names is its investment in frontline staff who can answer consumer queries and solve problems.

James adds that many people love the newer banks, but they don’t always get the help they need when things go wrong. It’s when things go wrong that a bank’s reputation is established. And where customer service has been reduced across the board, it’s the few good ones, such as Starling Bank, that stand out.

Consumer group Which? has also identified Starling as customers’ favourite bank.

Although Daley praises Starling’s consumer focus, he believes maintaining the advantage is the challenge. He cites Metro Bank, which came out top of the ratings seven years ago but has slipped steadily down the table ever since. First Direct, a ‘real star’ in respect of customer service going back many years, is a bank that continues to be consumer-focused, he says. He also rates Allied Irish Bank and Bank of Ireland for responding well to the pandemic.

However, the high number of complaints (37%) upheld by the FOS in the second half of last year has damaged Nationwide’s overall customer service performance. Daley says more than one in three bank complaints upheld by the FOS is not a good record for a mutual firm.

Fairer Finance rates companies for customer experience in product areas such as credit cards, car insurance and savings accounts.

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