Investment in complaints handling is bearing fruit, but there is still more for UK banks to do
9 April 2014
- 20% of UK banking customers complained about a problem in 2013
- 70% were satisfied with how the complaint was dealt with
- But, there is a 50% increase in disgruntled customers who intend to close an account in the next 12 months
UK banking customers registered the third lowest volume of complaints (20%) in the world in 2013, according to the EY Global Consumer Banking Survey. This compared to a global average of 34%. At the top end of the scale, the volume of complaints issued by Brazilian, Indian and Chinese banking customers was over double that of the UK, exceeding 40% of customers logging a complaint.
Unlike the FCA data, where the definition of a complaint is set by the industry, EY’s Global Consumer Banking Survey shows UK customers’ opinions on complaints and how they are handled.
Of the UK customers who logged a complaint, 70% were satisfied with the way it was dealt with (33% of that figure were ‘very satisfied’), which is close to the global average of 67%. The complaints encompass a very broad range of issues, with the highest volume related to standard operational issues, including loyalty/rewards programmes, data security breaches, and online and mobile banking.
How the UK compares with other countries
Japanese banking customers registered the lowest volume of complaints (7.7%), followed by Swedish customers (12%). Within Western Europe as a whole, the level of complaints averaged at a quarter of all customers, which compares favourably against the global average of 34% of customers logging a complaint.
Omar Ali, UK banking and capital markets leader, says: “Retail banking in the UK experienced its share of public flogging throughout 2013, with a number of system outages, branch closure announcements and the surfacing of historic issues. While the UK compares well against other countries, and retail banking is improving its complaints handling, for any consumer-focused business, 20% of customers complaining is still too high.”
Dissatisfied customers unlikely to recommend their bank to others
The survey found that although being satisfied with how a problem is resolved increases customers’ trust in their bank, it is not significant in terms of recommending the bank to others. This is because effective problem resolution is a service expectation. On the other hand, 40% of dissatisfied customers claimed that their likelihood to recommend their bank had reduced considerably.
Ali comments: “With the Government encouraging increasing competition in the market, customer retention has never been more important. Customer service is the bread and butter of retail banking and ensuring that complaints are dealt with effectively is essential, or customers will walk.
“Going forward, banks will increasingly need to use their vast amounts of data to prevent problems before they develop, rather than just looking to resolve them when they do. This will increase loyalty, advocacy and lower the costs of complaints handling.”