Leadership

Taxpayer-owned UK banks take customer-service savaging

03.02.2010
UK banks taken into public ownership have taken a savaging in a recent customer service ratings index.

The UK Customer Service Index from the Institute of Customer Service (ICS) showed that despite overall satisfaction with service at branch level, consumer ratings of banks’ reputation have dropped like a stone among those institutions taken into public ownership.

Royal Bank of Scotland’s reputation has been hardest hit, plummeting almost 20pc from 8 (out of 10) to 6 since July 2008.

Bank of Scotland’s reputation has fallen by more than 10pc in the same period (7 to 6), with Halifax and Lloyds TSB also falling slightly.

Alternative banks do well
Interestingly, the two standout performances in the sector are from banks with alternative offerings, and who have remained independent - online bank First Direct and the ethically positioned Cooperative Bank.

First Direct flourished in the latest survey, posting improvements in every element of service measured by the index. It is the highest-ranked bank, with a score of 84, and the eighth best individual performer across all 13 sectors measured by the index.

Meanwhile, the Cooperative Bank is ranked just behind on 83.

Galvanising effect of recession
Overall the recession appears to have had a galvanising effect on service within the banking industry, which has gained almost 3 points in the index since January 2008 to reach 75 points.

However, the sector still lags some way behind retail, which leads the index with a score of 79.

Work to be done
“Despite the financial crisis, banks deserve credit for not being distracted from the strategic importance of retaining customers by delivering excellent service at the frontline,” saidICS Chief Executive Jo Causon.

“But there is clearly work to be done to regain the goodwill lost during the crisis,” she added.