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Best companies for customer satisfaction as banks and building societies overtake retail

Analysts said some companies have struggled to set themselves apart for customer service in terms of their online presence

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Banks have overtaken retail in terms of customer satisfaction(Image: Getty)

Nationwide has been named the best-performing brand for customer satisfaction, as banks and building societies have overtaken the retail sector for the first time.

Nationwide scored 87.3 out of 100 in the latest UK Customer Satisfaction Index (UKCSI) followed by John Lewis (87.1) and first direct (86.0).

Meanwhile, the most improved brands are OVO Energy, which was up 7.9 points year on year, Northumbrian Water (up 7.3 points) and Land Rover (up 7.1 points).

Retail has led all sectors for customer satisfaction since the UKCSI was launched in 2008. But analysts said some companies have struggled to set themselves apart for customer service in terms of their online presence.

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It also notes that some have experienced failings by their delivery partners, which has dented the overall customer experience for some shoppers.

But there has been growing emphasis placed on customer satisfaction, loyalty and retention by the best-performing banks and building societies in recent years.

The data reveals a significant rise in sector performance since the introduction of Consumer Duty in 2023, which made it mandatory for financial services firms to focus more on customer outcomes.

The index also reveals a fourth consecutive increase in customer satisfaction, reaching 78.3 (out of 100) - a 1.0-point increase year-on-year.

However, the rate of increase has significantly slowed, with the Index sitting just 0.1 higher than six months ago.

Jo Causon, CEO of the Institute of Customer Service says: Customer satisfaction with banks and building societies has been improving steadily for some time now, in what has been a long-term turnaround for an industry whose reputation was severely damaged with the financial crisis.

The sector has led the way in app development, with many providers now offering an excellent digital experience for routine transactional elements combined with well-trained, motivated and empowered employees for more complex requirements. Regaining trust has been paramount.

Its also likely that Consumer Duty has played a role in ensuring financial services businesses focus on the customer experience, specifically in the boardroom.

Published every six months by the Institute of Customer Service, the UKCSI tracks 13 sectors across the UK economy.

The UKCSI also tracks consumer confidence. It finds that since January, the proportion of people who feel better off compared to a year ago has fallen from 38% to 35%, while those predicting they would be better off in a years time has fallen from 43% to 39%.

Jo Causon says: The latest UKCSI reveals a levelling off of the customer satisfaction increases weve seen over the last two years, which sits at the highest level since July 2022.

Our data shows consumers are less confident in their outlook for both the UK economy and their own personal finances than they were six months ago.

"This, when taken alongside the slowdown in our Service Nations recovery, should reinforce to businesses the importance of doubling down on their service offering at this moment; those that continue to invest, strike the right line in their approach to AI and sharpen the end-to-end customer experience will be best-placed to keep customers engaged and grow their business.

Businesses are still managing through a period of volatility, and we may need to accept that this is the new normal. In a competitive landscape, we are seeing winners emerge who build trust, do the right thing and deliver a product and service experience that their customers genuinely value.

Highest rated organisations in the UKCSI

1. Nationwide - 87.3
2. John Lewis - 87.1
3. First Direct - 86.0
4. Jet2Holidays.com - 85.7
5. M&S (Food) - 85.7
6. Specsavers - 85.0
7. Hays Travel - 84.9
8. Petplan - 84.7
9. PayPal - 84.6
10. UK Power Networks - 84.4

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