Banks will now have to publish how likely their customers are to recommend them for customer service as part of new measures designed to make it simpler for consumers to compare and switch.
The Competition and Markets Authority (CMA) and Financial Conduct Authority (FCA) said larger banks were not competing enough for customers, leaving consumers missing out – with just 3% of UK personal banking customers switching to a new bank in any given year.
Banks will now have to publish information about their quality of service, overall, in their branches and for their website and apps, and display it in their branches. They will also have to send reminders to customers when making changes such as closing branches or hiking charges.
A key measure of service will be whether customers would recommend their bank to family and friends. In the first poll conducted for this new measure, First Direct topped the chart with 85% of customers recommending its service, while Clydesdale Bank and RBS jointly took the wooden spoon with just 49% of customers willing to recommend them.
These results mirror our biannual banking customer service polls, with First Direct coming top in every poll we've done and RBS bottom for the last two. Our polls also show strong results for app-based challenger banks such as Monzo and Starling – too small to be featured in the official poll.
Banks will also need to alert customers when they go into an unarranged overdraft, and provide them with a grace period where they can avoid charges. Banks will be required to set a monthly cap on unarranged overdraft fees too.
For more info on the seven working-day switch service guarantee and how you can get a free £75 in cash or £185 in vouchers to switch, see our Best Bank Accounts guide.
How did my bank fare?
The independent poll on customer service for banks in Great Britain was conducted between September 2017 and June 2018 by GFK UK Limited.
More than 16,000 current account customers were asked how likely they would be to recommend their provider, their provider's online and app service, overdraft services and service in branches to friends and family. The results show the proportion of customers of each of the largest 16 providers who said they were 'extremely likely' or 'very likely' to recommend each service.
How likely customers are to recommend their bank
|Provider||Overall service||Online and app service||Overdraft service||Branch service|
|First Direct||85%||87%||75%||N/A (1)|
|Coventry Building Society||68%||64%||57%||79%|
|Bank of Scotland||57%||75%||50%||67%|
|Royal Bank of Scotland||49%||65%||47%||59%|
|Approximately 1,000 customers a year will be surveyed across Great Britain for every provider with more than 150,000 personal current account customers. The results are only published where at least 100 customers have provided an eligible score for that service in the survey period. (1) First Direct doesn't have branches.|
New results will be released every February and August. You can see more on the results on the GFK website.
There are separate results for Northern Ireland, in which Nationwide topped the overall rankings and Bank of Ireland came bottom.
For more information on how to switch, see Best Bank Accounts.
Why are the changes being made?
The new rules follow an in-depth investigation of the banking sector by the CMA.
The CMA's report sets out changes which banks must make to improve their services. These include:
- Banks must clearly publish the customer recommendation info from today, and display their own results alongside the scores of the top five banks – if not in the top five, they'll have to make it clear where they came overall.
- Implement 'Open Banking' which lets consumers share their data with third parties – for example, budgeting apps – to help them manage their accounts. For more on this, see our Open Banking guide.
- Publish figures on how long it takes customers to open accounts and replace debit cards. Banks will have to do this from February 2019.
- Provide customers with their transaction history.
What does the CMA say?
Adam Land, senior director at the CMA, said: "For the first time, people will now be able to easily compare banks on the quality of the service they provide, and so judge if they're getting the most for their money or could do better elsewhere.
"This is one of the many measures – including Open Banking and overdraft text alerts – that we put in place to make banks work harder for their customers and help people shop around to find the best deals for them."
Christopher Woolard, executive director of strategy and competition at the FCA, said: "Getting a good deal isn't just about pricing. It's also important for customers – including individuals and small businesses – to be able to judge the quality of service around their current account and to see whether other providers could offer something that suits them better.
"This information should encourage providers to offer the services that people value."