With customer satisfaction at its lowest since 2015, financial organisations must make service a boardroom priority

  • 16 March 2021
  • Blog | Thought Leadership Insights | Managing People | Blog

By Jo Causon, CEO, The Institute of Customer Service 

There is no doubt we are navigating one of the most challenging periods in our living history. The events of the past year have shaken and changed the customer experience environment, perhaps forever, and the impact on the customer/organisation relationship is starting to become clear.  

The results of our latest UK Customer Satisfaction Index (UKCSI), published in January 2021, revealed customer satisfaction in the UK continues to decline, reaching its lowest level since July 2015. The banking sector contributed to this trend with one of the largest declines of any sector – falling by 1.2 percentage points year-on-year.  

The dip in customer satisfaction was led by a worrying rise in the number of customers experiencing problems with banks and building societies – which has risen to its highest rate since July 2014. Common issues range from the quality or reliability of services (29.4%) to staff competence (22.3%) and instances of slow service (18.4%), with cost felt to be less important at 8.9%. What’s more, average satisfaction with complaint handling has fallen by 0.9 points.  

Of course, it may be argued that banks and building societies have been dealing with an increasingly frustrated and concerned customer base over the past year, as the economic impact of the COVID-19 pandemic put growing pressure on customer finances. These problems are not new, however; we have seen a worrying decline in customer satisfaction in this country since long before the pandemic hit. As we continue to navigate a period of uncertainty and disruption, the sector’s business leaders must take these figures as a wake-up call to make service a boardroom priority.  

 The reality is that customer behaviours have changed – and in many cases these shifts are likely to stay around for the long-term. Consumers are seeking to deal with organisations that ‘do the right thing’ and demonstrate that they care about the customer and meet the ever-changing benchmark of customer needs. Trust, reputation and ethical behaviour have also risen further up the agenda. Now is the time to reflect on what we have learnt over the past year and using it to refocus our efforts for the long battle ahead.  

 We have seen a polarisation in the way businesses have responded to shifting consumer needs whilst being faced with numerous national lockdowns. Many have displayed agility to ensure they can continue to maintain services and react proactively to ever-changing circumstances.  It is encouraging, for example, to see first direct buck the overall sectoral trend to take the top spot in the UKCSI league table, being one of the two highest rated organisation across each of the customer satisfaction dimensions we measure: Experience, Customer Ethos, Emotional Connection and Ethics. However, others have struggled to meet the demands of a more complex trading environment, further adding to the disruption and anxiety experienced by their customers and employees.   

The shift to online banking and banking apps has been accelerated during the past year, and it is encouraging to see that average customer satisfaction amongst those who use a banking organisation’s app is the highest of any channels. As we look to the future – and JP Morgan’s new digital bank joins the list of fast-growing challengers like Starling and Monzo – banks and building societies will need to continue to be smart and agile in harnessing technology to enable fast, efficient transactional service and access to critical information and advice. Yet, whilst customers are increasingly comfortable using online channels, our research suggests they still require the empathy and reassurance of human contact. It is clear that the key here lies in offering a channel by choice – providing customers with a range of options for how they want to interact with an organisation, based on their specific issue or need – should it be via app or in branch interactions. Increasingly, organisations will need to develop and excel in each of these areas to adapt to customer needs and create a sustainable future.    

Providing good customer service is a key enabler of business performance – and now more than ever, the service agenda is central to the future of our organisations and our economy. In an increasingly complex customer experience environment, a bad encounter makes the difference between a one-off interaction and a long-term, loyal customer. As the UK economy continues to feel the devastating impact of the coronavirus crisis, maintaining excellent service levels will be crucial to pulling the nation out of recession and supporting our service nation.