The big news in the UK banking sector at the moment is the Competition and Markets Authority (CMA)’s recent step to make the industry more transparent.

Every bank-of-a-certain-size in the UK now has to publish the same independent survey results prominently on their websites and in branches.

The move is all about making it easier for customers to search for the best bank for their needs and switch if they could get a better deal.

The CMA says it will be updated every six months and has already slapped a few wrists for not displaying them prominently enough.

What was in the CMA survey?

First, let’s have a quick look at the survey itself. It was conducted by GfK, Germany’s largest market research institute. They asked customers how likely they would be to recommend their personal current account provider to friends and family:

…How likely they would be to recommend their provider’s online and mobile banking services to friends and family:

…How likely they would be to recommend their provider’s overdraft services to friends and family:

…And how likely they would be to recommend their provider’s branch services to friends and family:

As you can see… good news if you’re a First Direct, or a Metro Bank. Nicht sehr gut if you’re an RBS or a Clydesdale.

But this leads us to a deeper question. What separates the top banks from the ones on the bottom? What are the good banks doing better – and what steps can the cellar-dwellers put into place so that they aren’t on the bottom of the list in six months?

Comparing the top and bottom ranking banks

GfK’s survey looked at these points:

  • Current account
  • Online and mobile banking
  • Overdraft
  • Branch services

But we’ve done some of our own analysis, and here are some of the more ‘human’ factors we think really separate the top and bottom banks.

1. Fitting into people’s lives

Metro Bank branches are open seven days a week, 8am to 8pm on weekdays. You can pop in any time without an appointment. Compare that to most banks, who bewilderingly still close at 4:30 even though almost every other industry has found a way to get around the peculiarities of their internal processes.

“Our model is based around convenience and it is designed to make it easy for customers to open a bank account – it might only take 15 minutes.”

– Metro Bank founder Vernon Hill

Older banks have inconvenient opening hours because… well… they used to be able to get away with it. It’s not like that anymore. People are shopping around, looking for opinions online, and taking control of their money.

Yes, the rate of people that actually switch is quite low now. But customers can now walk into an RBS branch and realise that there are actually banks that you don’t have to take a day off work to visit. And we think that’s a great step.

2. Transparency – especially around fees

We’ve all copped an overdraft fee or two in our time. It’s a fact of life. But what does it actually cost the bank?

This Telegraph article from last year runs through some of the current accounts on the market, and their overdraft fees.

From the article:

The Select account offered by RBS and NatWest does not pay interest and carries hefty overdraft fees… £8 per day capped at £80 per month.

RBS and NatWest are a long way from to #2 on the overdraft rankings, First Direct, who have the same monthly cap but simply offer the first £250 fee-free. Seems an easy fix for those banks on the bottom.

There’s a vast discrepancy between fees for quite similar offerings, and thanks to the CMA’s action, that’s going to be under the microscope.

3. Actually knowing what their customers want

A positive and negative example from Nationwide will illustrate our point.

The bank is actually a very good example of an organisation getting serious about the voice of the customer.

Most companies just invest in voice of the customer initiatives, but Nationwide wanted to get around the lag time that generally comes between the insights and the action. The bank wanted to understand customer needs and act fast but also ensure the data had depth – so it conducted customer journey analysis, open-ended responses, and perception surveys.

Once Nationwide had the customer data, the team made sure to connect it to right decision maker fast in a way that was bespoke to each branch/division and training programme.

This KPMG report explains more and shows how the strategy led to a rise in the UK PLC score for customer experience excellence for the first time in three years.

Ok, now for the bad…

When Nationwide decided to scale back its telephone service – the one that lets customers pay bills and transfer cash – there was an uproar.

The service is used by elderly and those living in areas of poor internet service, and some would have had to drive miles to nearest branch (which aren’t open on the weekend). Some said they’d rather change banks than be forced to use internet and mobile banking.

Nationwide’s CEO was paid £2.3m in perks right around that time, further angering customers.

Patrick Tyrrell, 72, a business owner in Midhurst, said it best:

‘Reducing costs is not a good enough reason to cut a service when people are still using it.’

The plan was scrapped.

The lesson? Rather than using NPS and customer feedback as just another internal KPI, it needs to be used as a tool for business transformation.

4. Giving the impression that they know what they’re doing

TSB had IT issues in April.

RBS recently had issues with PPI claim process being too difficult.

Lloyds Banking Group, which includes Halifax and Bank of Scotland, reported 19 operational incidents between April and June this year.

Lloyds were accused of deterring claimants after consumers received 12-14 page questionnaires requesting historical data.

When banks like Starling and Monzo are breathing down your neck, these incidents and a poor UX stick out more and more.

How we see it overall

Banks need to play to their strengths. If you skew to younger customers, you need to be mobile-first and your digital services actually need to work.

If you’re popular with older consumers, don’t try to get them online – understand they prefer telephone or in-branch banking and make room for variations based on location (e.g. in more rural areas).

Key, of course, is customer service – and that trancends any format. It just needs to be part of the culture.

Profiling the best and worst of UK banking