CMA releases banking satisfaction survey results.

The survey is a result of reforms put in place by the Competition and Markets Authority (CMA) following its retail banking market investigation in 2016. This is the now sixth year of publication of the biannual results, which started in August 2018 (for a survey between 1 July 2017 and 30 July 2018 

There are four surveys in total: personal and business account holders for Great Britain, and likewise for Northern Ireland.  

The banks in the survey are those with more than 150,000 active personal current account holders in Great Britain and more than 20,000 small business accounts (Northern Ireland: more than 20,000 personal current accounts and 15,000 business current accounts).  

There are 16 (personal) and 15 (business) banks represented in the latest surveys for Great Britain. While the number of banks in the survey has stayed stable, the banks in the survey have changed over time (so Tide, Monzo and Starling have only recently joined; while Clydesdale Bank and Yorkshire Bank were rebranded as Virgin Money). It should also be noted that some banking groups (eg Lloyds Banking Group) are represented more than once (typically a legacy of banking mergers in the 2000s).      

The surveys asked 1000 (personal) and 1200 (business) representative customers of each bank four or five questions designed to elicit their satisfaction with their bank. The overarching questions were whether customers would recommend their business or personal current account to another SME or friends and family. Other questions covered online and mobile banking services, overdrafts and loans, relationship or account management, branches and service centres (each time the question being whether the customer would recommend). The survey results are the percentage saying that they were “extremely likely” or “very likely” to recommend the provider.   

The surveys are carried out by Ipsos (personal) and BVA-BDRC (business), and the detailed result are available on their websites.  

Chart 1 shows the percentage of customers that would recommend their business account to other SMEs for each year that the results have been published.

Monzo, Starling and Handelsbanken were the top ranked providers for the report published in August, while Virgin Money, Cooperative Bank and HSBC were the worst three. These rankings were the same as last year, albeit Monzo has supplanted Starling at the top as it improved its score from 79% to 84%; and the Cooperative bank moved up one place from last.

Looking over the six years of the survey, the following overall trends seem apparent: that generally there is little movement in rankings; that smaller and newer banks tend to score better; and that the results overall and by individual bank do not show any significant improvement – if anything customer dissatisfaction has increased over the six years of the survey.

As there is no accompanying analysis by the CMA to explain the results, we can only speculate on the reasons. Firstly it could be said that smaller and newer banks provide a better service as they need to compete on quality for business, whereas the larger banks perhaps rely on their entrenched positions and customer inertia.

Smaller and new banks (in particular digital banks) may also be more agile, with the latest technology providing a quicker more efficient customer experience. They are not encumbered by clunky legacy IT systems and do not suffer the negativity that comes with branch closures, as with the larger older banks. The custome base of the small and new banks may also be narrower and so it is easier to cater for their individual needs.

The prevailing economic environment, and the impact that has on the demand for services and confidence, might influence how positive or negative customers feel about the service levels they receive. Since 2017 when the first survey interviews were conducted, we have experienced COVID, war and high inflation. In the face of a potential recession, banks also tend to pull back from lending, which likely exacerbates dissatisfaction.

Chart 2 shows the results of the similar question posed to holders of personal current accounts.

Monzo, Starling and First Direct have consistently been at the top, while the Royal Bank of Scotland has propped up the rest.

The average satisfaction scores are around 10% higher for personal current accounts than business accounts. Personal customers are perhaps more easily satisfied, or they have fewer complex interactions with their bank than SMEs and so less scope to be disappointed.

Otherwise, the overall trends are similar to those with business accounts, and likewise we may speculate for similar reasons. Generally, smaller and newer banks provider better customer satisfaction. First Direct is a subsidiary of HSBC, but is differentiated from the traditional commercial banks, as it is a telephone and internet based; while Nationwide perhaps brings a more customer focused approach as a consequence of the building society ethos not found in banks.

There have however been some bigger changes over the period for some of the banks – notably Metro and Virgin Money have experienced falls over 10% - maybe as the initial impetus from creating a new bank (eg Metro was founded in 2010) or banking group wanes.

The rank ordering for the larger banks also shows some changes. While Lloyds generally performs better than peer for personal and business accounts, Santander and Royal Bank of Scotland perform relatively worse.

 It was an aim of the CMA reforms to promote competition between bank account providers and improve the treatment of customers by enabling customers to see, judge and act on their performance. As the scores have generally worsened and there is little apparent movement in rankings, it is not overly apparent that aim has been achieved.   
It is also of note that the scores for the top scoring providers, have generally declined more than for the middle. This perhaps shows that it is a challenge to maintain quality and/or that complacency can easily creep into approaches. 

There have been a number of other initiatives to improve customer treatment, notably the FCA’s new Consumer Duty which came into force on 31 July 2023 (see this Insights article). Given the complexity and challenges with implementing the Consumer Duty, it may be a few years before any effects, if any, feed into these survey scores.