More customers keen to switch as high street banks slated on service

HIGH fees and charges, bad customer service and poor communication are leading to dissatisfaction with the services offered by high street banks, according to a survey published today.

Bank of Scotland, Lloyds TSB and Clydesdale are among the lowest-rated banks, according to a survey of almost 4,000 customers carried out by a consumer research organisation.

One in five reported having had a problem with their bank in the last year, while more than one in ten said they were thinking of switching banks.

Stuart Crawford-Browne, senior research manager at JD Power, which carried out the research said: "Customers in the UK hold generally negative perceptions of their banks' motives, particularly regarding the pursuit of profit at the expense of the best interests of their customers.

"Overcoming these image problems will be an important step in salvaging customer loyalty rates, which are key to ongoing profitability."

According to the survey, the three biggest complaints customers had were about fees and service charges, poor customer service and the way transactions were carried out.

Internet and phone bank First Direct topped the poll for satisfaction, while Santander came bottom. Bank of Scotland, Clydesdale and Lloyds TSB were all ranked below average.

Whereas once customers were reluctant to change banks, the survey found that 12 per cent said they were actively interested in switching accounts – while 7 per cent said they had changed in the previous year.

Poor customer service and problems with online banking were the fastest growing problems, with many customers saying they had to contact their banks more than once for the problem to be resolved. Six out of ten people who had experienced a problem said they were not told how long it would take to be resolved.

Researchers said the levels of satisfaction among bank customers were considerably lower than those of customers of other goods and services.

Mr Crawford-Browne said: "Despite efforts by many banks to become more customer- focused, there still appears to be a gap between account holder expectations and banks' ability to deliver on them.

"While UK bank customers historically have been slow to switch primary financial institutions, their frustration is mounting. It is increasingly likely that customer patience will reach a breaking point and, unless things change, take their accounts away from high street banks and go to institutions that will listen to and accommodate their needs."

Kevin Mountford, head of banking at Moneysupermarket.com said: "I think there are a number of pressures on the banks and at the same time there is more consumer awareness – I think consumer expectations are increasing.

"People find it frustrating that it seems you can get good prices or good service – but you can't get both."

Lucy Widenka, financial services campaigner from Which?, added: "It is not surprising that trust seems to be getting lower in financial services – the banking crisis has had an impact on people's level of trust.

"There have also been all sorts of mis-selling scandals with people being sold products they didn't need."

According to the survey, satisfied customers were more than ten times as likely to recommend their banks to others – while dissatisfied customers were more than six times as likely to switch banks.