Smaller banks have the happiest customers with complaints and queries a huge challenge for major banks in the pandemic
Great service: New mobile bank Starling has delivered service par excellence
Dealing with customer complaints and queries has been a major challenge for the banks over the past 12 months as they have cut branch opening hours and often worked with reduced staff numbers.
But some have coped much better than others.
The latest analysis of feedback and complaints data conducted by consumer website Fairer Finance shows that big brands such as Halifax, Nationwide, HSBC and NatWest have struggled to meet customers’ expectations.
In contrast, new mobile bank Starling Bank, Cumberland Building Society and C Hoare & Co – the country’s oldest privately owned bank – have continued to deliver service par excellence.
Others such as Allied Irish Bank and Bank of Ireland have improved.
Fairer Finance has been constructing its ‘customer experience’ ratings for the past seven years.
According to James Daley, managing director, customers are ‘generally happy’ with their banks’ performance during the pandemic. But he says experiences vary widely.
He adds: ‘For some firms, the pandemic pushed them to try new things – and they surprised themselves in terms of what they were capable of.
‘Others were woefully underprepared and struggled to maintain decent customer service levels.’
The website’s rating are compiled using four criteria, two of which are based on customer views and the others on analysis of complaints data and the bank’s product literature (especially the terms and conditions).
The ‘happier’ a bank’s customers, and the more customers trust the bank brand, the higher the Fairer Finance rating a bank gets.
In contrast, an increase in complaints passed to the Financial Ombudsman Service and then upheld will result in a lower rating, as will products with confusing terms and conditions.
The average of the four scores – with 100 being the highest – provides the overall rating.
The latest scores range from just above 75 to 51 per cent.
Daley says the ratings are important because people will often stay with a bank for many years – ‘so picking one with a good reputation for service is crucial’.
Top of the customer experience charts is Starling Bank. Martyn James, head of media at complaints resolution company Resolver, is not surprised.
He says: ‘The difference between Starling Bank and other start-up banks and mainstream names is its investment in frontline staff who are able to answer customer questions and sort out problems.’
He adds: ‘A lot of people love the newer banks, but when things go wrong they don’t get the help they always need. It’s when things go wrong that a business is defined.
‘And in a world where customer service lines have been cut, hidden or reduced, the few good ones stand out. That’s the deal with Starling Bank.’
Consumer group Which? has also recently identified Starling as customers’ favourite bank.
Although Daley hails Starling Bank’s customer-focus, he says ‘keeping the spark is the challenge’.
He points to Metro Bank, which was top of the ratings seven years ago but has steadily slipped down the table ever since.
Banks that continue to be customer-focused, says Daley, include First Direct – ‘a real star in terms of customer service going back many years’.
He also rates both Bank of Ireland and Allied Irish Bank for responding well to the pandemic.
In contrast, Nationwide’s overall customer service performance has been impaired by the high number of complaints (37 per cent) being upheld by the Financial Ombudsman Service in the second half of last year.
‘More than one in three bank complaints upheld at the Ombudsman is not a great record for a mutual firm,’ says Daley.
Fairer Finance rates companies for customer experience in all key product areas including credit cards, car insurance and savings accounts.
The latest ratings for car insurance put Civil Service Insurance Society and NFU Mutual first and second.
Fairer Finance is raising £250,000 to fund its business expansion. Details on crowdcube.com.