UK banking satisfaction rises with competition
The proportion of Britons who are satisfied with their current account has risen over the past six months, with the greatest boost among consumers who use packaged or fee-paying accounts, according to banking customer relationship consultancy, Cims.
This increase in satisfaction follows a period of intense competition as UK banks attempted to win or retain their share in the current account market. According to survey figures from MORI, based on interviews with more than 20,000 consumers, more than half of current account holders (53%) said they are "very satisfied" with the service they receive, showing an increase from 50% six months ago. A further 38% are "fairly satisfied", while only 3% are "fairly dissatisfied" and 1% are "very dissatisfied".
Amongst packaged account holders, the proportion who are "very satisfied" rises to 56% - an increase from 51% six months ago. Although the satisfaction level increases are only marginal, they suggest that UK retail banks are heading in the right direction.
Fee-based is better Cims, which works with banks to enhance the consumer's experience and improve customer loyalty, believes that people are happy to pay a fee for their current account if they feel they will receive better service and enjoy access to a range of different products and competitive interest rates. This idea is also supported by recent consumer research in the US which showed that consumers are willing to pay more money for better customer service (see 17th Oct. 2003).
The proportion of new accounts that are packaged has risen to its highest level ever, with 9% of those opening a new account opting to pay a fee for a range of financial and other benefits, up from 6% one year ago. Some 16% of current account holders now have packaged accounts, up from 5% in 1998.
Still shopping around Consumers are increasingly choosing to shop around, as shown by a declining importance of branch proximity to the home or workplace when choosing a current account. Historically, this has accounted for more than a quarter of all current account openings, yet it applied to only 17% for accounts opened in the past year. This decline has been accompanied by a growth of other factors such as personal recommendation, competitive interest rates and internet access.
"The competition in the current account market has been good news for consumers. It's made banks and building societies really examine what they offer their customers," explained David Steele, head of client management (UK & Ireland) for Cims. "People will vote with their feet and switch providers if they're not getting value for money and good service. We have also found that if you design accounts that offer benefits which customers really want and need, they are prepared to pay a small monthly fee and are more satisfied with - and therefore more loyal to - their banks as a result."