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Sector Spotlight: Customer Satisfaction in UK Financial Services 2020

March 6th 2020

Free 20-page report plus actionable strategies for banks and insurance providers to create a great customer experience

There are over 70 million current accounts in the UK and our insurance industry manages investments of over £1.6 trillion. So why are both traditional and challenger banks and insurers falling short of customer expectations?

Our recent satisfaction survey looks in depth at the leading causes of consumer frustration, and asks ‘What financial services providers can do to turn this around?'

Download the report

Problem-solving and tricky conversations

During the three months to October 2019 customer satisfaction in banking and insurance has declined, with the all too common issues of 'resolving current account problems' and 'discussing the value of my premium' cited as the leading causes of dissatisfaction. As expected, this has resulted in customers being less likely to recommend their providers and buy products from them again.

Our research highlights the need for banks and insurers to evolve with the changing needs and higher expectations of their customers. Perhaps a shining light in all this is that our survey showed that the change in customer feeling is not significant. Small but impactful improvements to core customer processes and staff training will ensure a consistent customer experience.

Perhaps unsurprisingly, our results also show that the amount of effort banking and insurance customers have to exert to achieve their desired outcome also increased. Despite this rise, the sector's customer effort rating is still better than the average for the country across major sectors and is only marginally higher than supermarkets and retailers – sectors renowned for crafting low-effort experiences.

Seamless omni-channel interactions

Creating a fast, frictionless customer experience is highly desirable and critical for generating customer loyalty. While many banking and insurance companies have introduced online chat and self-service transactions to support this, customers still expect to be able to speak to a customer agent quickly if they encounter a problem or want to swap from digital to human interaction.

It’s no great surprise then that given the decrease in customer satisfaction, we discovered that customers are less likely to recommend these organisations to others. But while recommendation ratings dropped over time, they were still better than the cross-sector average. Topping the list is online retail, indicating consumers’ approval and advocacy for companies providing a seamless, low-effort, Amazon-like buying experience.

It’s better to keep a customer than to find a new one

Another key metric impacted by high effort and low satisfaction is a customer's propensity to re-use or re-purchase from an organisation again. Companies rely heavily on customer retention, and it is a reliable indicator of the health and longevity of a business. The drop in satisfaction with banking and insurance providers and an increase in customer effort is evident in our re-purchase results which show customers likeliness to re-use their bank and insurers fall over the study period.

Which banks are getting it right?

Our benchmarking results reveal the individual banks with the highest customer satisfaction scores are:

  • First Direct
  • Nationwide
  • American Express

Our data also shows that these are best performing banks in relation to customer effort, in other words, the ease with which customers can fulfil relevant tasks:

  • First Direct
  • Nationwide
  • Santander

The attribute which received the highest customer satisfaction rating and lowest customer effort score was ‘managing my current account’.

Which insurance companies are getting it right?

Our benchmarking results reveal the individual insurers with the highest customer satisfaction scores are:

  • Direct Line
  • Churchill
  • Admiral

What are the main causes of frustration for customers?

One area that organisations struggle with across all sectors is improving call centre wait times. While many have introduced IVR (Interactive Voice Response) technology to reduce costs and waiting times, customers recognise that IVR is a queue management system rather than a fix for shortening hold times.

Customer comments relating to their banking and insurance providers IVR included frustrations such as:

  • No menu
  • Wanting it to be easier to contact the provider by telephone
  • Desiring a shorter wait time

When asked what their ideal customer service would look like, customers’ comments included:

  • Immediate contact on the phone rather than pressing a dozen buttons
  • Easy and quick to contact
  • Operator is quick to understand problem and a solution offered / fixed the first time

The Million Dollar Question - What makes bank and insurance customers happy?

  • Managing my current account drives the highest customer satisfaction.
  • Switching bank accounts occupies the middle satisfaction ground. 
  • Resolving current account problems received the lowest satisfaction score.
  • Transparency from the start when it comes to insurance deals.
  • Rewarding customer loyalty.

Customer satisfaction with switching accounts increased only slightly in the past six months, indicating there is currently little differentiation between banks’ approaches to this service. As account switching typically follows a set process, our research suggests that getting this right and making switching as simple and stress free as possible for customers can set new ground for creating stronger customer loyalty and recommendation.

Our research shows that customers want above all, better phone call management and transparency from the start when it comes to getting the best insurance deal. Loyal customers feel their loyalty goes unrewarded and that it turn damages the brand and effects customer retention and recommendation.

What drives customer effort in banking?

The bank service customers see as requiring the least customer effort is managing my current account. Switching bank accounts is also perceived neutrally, as neither a high or low effort transaction. The service customers see as needing the most effort is resolving current account problems.

Banks keen to reduce customer churn should ideally explore and focus resources on resolving customer issues quickly and effectively first time.

Put simply they want to talk to a real person, be listened to and have their problem dealt with as quickly and effortlessly as possible. Technology cannot make up for human interaction.

Ready to start improving your customer experience?

Providing a great customer experience (CX) is crucial for all companies, but particularly for organisations in the fiercely competitive financial sector.

To remain competitive, generate profit and differentiate from competitor services, financial organisations must start filling the gaps between what customers expect and the service reality, starting with:

  1. Acquiring customer feedback across all touchpoints and channels
  2. Reducing- customer effort
  3. Gathering real-time customer insights
  4. Making employee engagement part of your customer experience strategy
  5. Starting competitive benchmarking

We go into detail about how each of these strategies work together to improve your banking and insurance customers’ experience. Download the report and turn to page 16.

Are you ready to find out what your customers  really think of your business? Contact us using the form below for advice on how to assess and improve your customer journeys and get ahead of the competition.