Banks give insurers a lesson in improving customer satisfaction

No one’s going to pretend that banks haven’t had a battle to win back customer confidence. Since the 2007 economic crash, they’ve faced constant accusations of (and lawsuits against) malpractice. The PPI scandal did little to win back the trust of the UK populace, either.

Confidence in banks had hardly been lower since the Wall Street Crash. Perhaps, more than any other industry, they faced an uphill battle to win back the trust of the public. But the signs from Engine’s Customer Experience Survey suggest that they’ve taken their foo-foo pill with relish and are striding towards the very summit of customer satisfaction.

Last year, the Customer Experience Survey highlighted that 29% of respondents rated banks as having poor customer service. That figure has dropped by more than 20% for this year’s survey, with only 23% of respondents registering chagrin.

Utility providers also saw a great improvement in their reputation management. Last year, a whopping 40% of respondents have an axe to grind with the utility companies. That dropped to 31% in this year’s survey, a huge success for the sector.

Why is insurance not seeing the same swing?

What is surprising is that insurance firms, hit with the similar dilemma of hordes voicing dissatisfaction, have done little to improve the impression of their services. Last year 27% had a bad impression of their customer service; this year, that figure’s exactly the same.

There have been reasons suggested as to why the difference in perception should show such a swing for those who’ve seen improved ratings.

For banking, projects such as Barclay’s “Digital Eagles” and the connection of online banking to real world accounts has been a boon for customers. The ability for customers to switch banks within a week has also helped demystify the retail side of finance.

For the utility services, comparison sites such as uSwitch have similarly made a difference. No longer do consumers have to ring around seven different possible suppliers, only to find that:

  • three of them didn’t supply to your are;
  • two of them didn’t do pay-as-you-go energy;
  • one didn’t do quarterly billing (or weren’t prepared to offer it to you);
  • and the only one who catered for your needs was your existing supplier.

Unless you’ve been there, you don’t know that pain. So being able to compare all utility suppliers just by entering your postcode and last bill information has been a massive win for the sector.

But haven’t comparison sites been around for a while, now?

The savvy amongst you will note that there are also many insurance sites, as well as those that offer domestic fuel supplier and bank account switching. Shouldn’t that have had an effect on the public’s perception of the industry?

The simple answer is, yes. Cover providers should be seeing the same positive swing as banks, utilities and public transport and public services, the latter two of which saw 8% and 6% positive swings respectively. But again, there is a theory as to why the swing isn’t so defined.

For one, people use their bank accounts (or at least the money therein) every day. We also use gas, electric and water daily. Those who live in and around cities and industrial areas also use public transport daily. They’re very tangible services, providing direct benefits.

It’s not so with insurance. We’re paying for a service that we may never use. You could argue that car owners also pay for such service in their Community Charge, but that’s a priority bill. The amount and whether we choose to pay is not our decision.

With insurance, in most instances, it is a choice. We may pay premiums monthly, but taking out policies we only tend to do once a year. Insurance sites have just that one chance to make the right impression. If they get it wrong, it’s unlikely that they’ll see that customer again.

Will bank account switching plateau in driving customer satisfaction?

The second factor is that insurance websites, comparison or direct, have been around a lot longer than energy-switching sites. The ability to instruct a new bank to take charge of your account with just a signature is also a fresh idea in the grand scheme of things.

What banks can learn from this is that they must not rest on their laurels. They’re winning the confidence of the public back, but if they don’t take the reins, the impetus will tail off and plateau, like it has with insurance.

What do you feel your bank has improved in in the last year? And, more importantly, how could it better the service it provides to you in the future? Has banking customer service really improved by 20% in a year? It would be nice to think it had…

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