Customer Satisfaction with Banks in the United Kingdom Increases Despite Struggling Economy

Despite a challenging economic climate, customer satisfaction with retail banks in the United Kingdom has increased since 2007, according to the J.D. Power and Associates 2008 UK Retail Banking Customer Satisfaction Study released today.

Now in its second year, the study measures customer satisfaction with the 13 largest high-street banks in the United Kingdom based on six factors that drive overall satisfaction. They are: transactions branch, ATM/cashpoint, online and telephone; account opening/product offerings; fees; account statement; problem resolution; and convenience.

The study finds that overall satisfaction amongst retail banking customers has increased to 667 points on a 1,000-point scale in 2008-up 16 points compared with 2007. Whilst more than 50 percent of customers report that they have less disposable income in 2008 compared with 2007, 71 percent of these customers believe that their bank's stability has not changed in the past year. Additionally, 75 percent of these customers also indicate that they would recommend their bank to family and friends.

"The satisfaction increase across the industry in 2008 is particularly beneficial for both customers and banks," said Caspar Tearle, director of service industries research at J.D. Power and Associates. "High levels of customer satisfaction inevitably impact the number of positive recommendations that customers are willing to give, which in turn vastly reduces potential acquisition costs and positively impacts the bottom line for banks. Recommendations are also the single most important resource when customers want to switch their bank, so more positive recommendations can give customers more options and more confidence as they search for a new retail banking institution."

The Co-operative Bank ranks highest in customer satisfaction with a score of 746, followed by Nationwide 706 and RBS 703. The Co-operative Bank performs particularly well in five of the six factors that drive overall satisfaction: transactions; account opening/product offerings; fees; account statement; and problem resolution. Although still ranking below the industry average, Barclays improves considerably in 2008-up 32 points from the 2007 study.

The 2008 study also reveals the following key findings:

• More than 50 percent of all bank customers pay no fees or charges. Only 10 percent of customers pay charges for insufficient funds or overdraft fees, and 14 percent pay account service charges.
• Nearly 85 percent of all customers indicate that they would prefer to speak with a customer service representative located in their own country rather than a representative in a foreign call centre.
• Nearly one in five customers 18% has had a problem or complaint with their bank in the past 12 months.
• Among UK banks, the rate of customers switching banks is particularly low, with only 2 percent of customers indicating they "definitely will" switch their primary financial institution within the next 12 months.

Moneyextra.com recommends you take independent financial advice before acting on any article

2008-09-10 00:00:00 © Moneyextra.com