First Direct tops list for satisfied bank customers

The Leeds-based internet bank beat the Co-Operative Bank, which came in second, and Nationwide, which came in third, according to JD Power and Associates' 2010 UK Retail Banking Satisfaction Study.

Other banks in the region scored below the average customer satisfaction level – Halifax was ninth and Yorkshire Bank came second to last, just above Santander – which bought Bradford & Bingley's high street banks at the height of the credit crunch.

Matt Colebrook, First Direct's chief executive, said: "We're 21 this year, making us the longest- established direct bank in the UK and to have scored top marks in the Bank Satisfaction Study shows we're still ahead of the game.

"First Direct started its life with the word 'customer' in the middle of a blank sheet of paper and that's what we've done ever since – put our customers at the heart of the business."

According to the survey, First Direct scored 766 out of 1,000 on a customer satisfaction ranking list.

Royal Bank of Scotland, Barclays and HSBC were fourth, fifth and six. HSBC scored 683 out of 1,000, which was the industry average. Bank of Scotland was seventh, Lloyds was eighth, Halifax was ninth and NatWest was tenth.

Clydesdale Bank was 11th, followed by Yorkshire Bank in 12th place with 658 out of 1,000 and Santander was last at 13th with 646 out of 1,000.

Stuart Crawford-Browne, senior research manager at JD Power, said: "High-performing banks have differentiated themselves from the rest by offering simplicity, accessibility and personal service."

A spokesperson for Yorkshire Bank said: "Carrying a disclaimer that the ranks are 'not necessarily' of 'statistical significance' the survey appears to have little scientific merit. Good customer service is at the heart of our business and far more detailed independent customer engagement surveys demonstrate that our customers agree with our approach."

A spokesman for Santander said: "We know that our service has been stretched this year, because of significant demand for our market leading ISA and the integration of Alliance & Leicester. We have worked hard to improve our service and with the addition of 1,000 extra customer-facing staff we have seen improvements in our own monthly customer satisfaction surveys."

A spokeswoman for Lloyds said: "Our relationships with our customers are at the heart of our business. Like every organisation we know there are areas where we can improve and we are working with customers to do just that.

"Our priority is to ensure that we address our customers' concerns quickly, effectively and that we use this valuable feedback as a real learning opportunity."

The JD Power survey found that UK bank customers are a lot less loyal than they were.

In 2010, 12 per cent of UK bank customers said they "definitely will" or "probably will" switch to another bank – an increase of two percentage points since 2008. The percentage of customers who have switched banks during the past 12 months has increased to seven per cent in 2010, compared with three per cent in 2008.

"Customers in the UK hold generally negative perceptions of their bank's motives, particularly regarding the pursuit of profit at the expense of the best interests of their customers," said Mr Crawford-Browne.

The average overall satisfaction level of 683 on a 1,000-point scale is considerably lower than satisfaction levels in other industries. In 2010, 21 per cent of bank customers indicate said they had had a problem with their bank during the past 12 months.

The Customers who have to wait

UK customers said it takes almost twice as long to resolve problems compared with US customers, according to the survey by JD Power and Associates.

"Low levels of satisfaction with banks may be reflective of recent negative media coverage surrounding fees, tight credit and disparity in interest rates, as well as customer perceptions that banks assume that customers will put up with poor service," said Mr Crawford-Browne, senior research manager at JD Power. He added that while UK bank customers have been slow to switch primary financial institutions in the past, 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."