Are UK banks running before they can walk?

FIS Global, the world leader in banking and payment tech, commissioned Total Network Solutions to conduct its PACE Index. The index, Performance against Customer Expectations, monitors nine countries to establish how well consumers value their financial institutions.

From a digital viewpoint, consumers have few complaints (from the Western world, where the cloud infrastructure is honed). But it’s the basics that are letting the banks down, especially in the UK.

More challenger banks are waiting in the wings to pick up the business the big four are (inadvertently) leaving on the table. What’s making consumers try a new menu? The lack of faith in banks in key trust areas – such as relationships and transparency – could hold the secret.

Are UK banks really that bad?

On the whole, the story isn’t so bad for UK banks. They sit third in the July PACE Index overall table, scoring 79 out of a possible 100.

The US faired a little better, with 80 points, whilst German banks proved the cream of the crop with 83 points. Canada and France shared joint fourth with 76 points; a further three points back came Holland on 73, the average for the nine countries the FIS Pace Index monitors.
Map of 9 Countries Monitored by FIS PACE index
Unsurprisingly, the vast, much underdeveloped regions of India, Brazil and Thailand scored lowest. They notched up 68, 64 and 62 points respectively. In fairness, that’s not all that far from the UK’s own score.

The opportunity for banks to do better

Do consumers in developing countries have lower expectations? Or are Brits still miffed at the banks, at whose feet the blame for austerity and recession still lies?

There is the the likelihood that the British consumer holds banks responsible for much of the economic collapse. How right or wrong they are for making that assumption, well. We could dedicate a whole forum to the topic, not just a blog post. But the fact remains, the UK consumer wants more from its banks.

The recommendations in the report, Understand the Consumer Expectations Gap, are clear.

Banking customers want fair pricing. In the UK, with the media constantly referring to the main banks as the “Big Four”, there is a sense that monopolies (or even cartels) are just the other side of a very fine line. Continued discrepancies do not help the cause, either.

So it’s not only pricing that’s the issue; it’s the transparency of how the banks both do business and reach their tariff figures that can help win back consumer trust.

Are banks the victims of their own technology?

The same Big Four, with excellence in digital connectivity, lead 30% of Brits to reckon that they’re financially self-sufficient. But this may be creating a problem in itself.

Another request from the 1,000 Brits surveyed was for banks to offer better loyalty programmes. A lack of transparency, plus the distancing of the banks from the consumer via digital apps and online services, may be at fault, here.

Respondees stated that products weren’t simple enough to understand. And fear of the unknown – especially finances – is a factor banks need to address.

In many ways, banks leave consumers to their own devices. This is not the best way for banks to build the relations they need to to win back public confidence. Nor is it the best way for the public to become familiar with products other than their basic online account.

The opportunity for banks to reconnect with customers on a personal level is there, with:

  • greater rewards for loyalty;
  • a more approachable attitude;
  • simplification of (the descriptions of) products;
  • pricing transparency.

Can the banks retrace their steps and add the personal touch to their service? The rewards are there for those that can. Here’s the infographic to prove it:

Results of Q1 2015 FIS PACE Index (link to FIS in document)

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