Is consumer confidence in banks being restored?

30th Mar 2015

Figures from the UK Payments Council showed that over half a million UK customers had switched bank accounts in 2014 following new regulations introduced to make switching easier; a 14% increase on 2013 and a clear sign that consumers were unsatisfied with the service being provided by their banks. 

And only this month the Financial Conduct Authority announced it wished to make the switching process even easier, through Account Number Portability (ANP) – the process in which a customer can switch without having to cancel their direct debits and standing orders – as Government fears remain about the lack of competition in the retail banking sector.

Yet despite this, new research suggests that customer satisfaction levels, considered to be at a low point for most retail banks back in August, may be improving. The Grass Roots Group’s latest survey of 2,300 UK consumers states that only 12% of people are now looking to switch from their current bank, half of the figure from the same survey in 2012 (24%).

And the research also states that many customers are more positive about the experience they now have with their banks, despite the numerous recent polls that have said otherwise, and that the level of engagement had increased.

Only last year, research from Verint Systems and the Customer Contact Association (CCA) highlighted that consumers were more likely to stick with high street banks if they improved their communication methods, and these new figures suggest some have heeded the call.

However, the Grass Roots Group’s research suggests that banks still have a long way to go to truly restore confidence among their customers - three quarters of those surveys stated they felt their bank didn’t really know them as an individual, and that more could be done to personalise the engagement methods.

“A seamless communication strategy can drastically improve the customer experience, as customers will feel personally recognised, no matter who they speak to and whatever channel they use to interact with the bank,” says Adam Goran, divisional director for customer engagement at The Grass Roots Group. “It’s imperative that banks focus on laser targeted customer engagement and consistent communication at every interaction, to become truly customer-centric.

“Understanding customers as individuals, and treating them as such, is the key to relevant and targeted engagement, and the key to retaining loyal customers and encouraging other bank customers to switch allegiance from the competition.”

The survey did highlight those that have made significant strides in the right direction with customer engagement – Santander, First Direct and Nationwide all ranked highly in terms of customer service, trust and product offerings, which in turn had them voted the top choices for customers looking to migrate.

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