Customer dissatisfaction with banks increasing
04 August 2003
A total of 82 per cent of all banking customers in the UK don't see the point of making a complaint, according to a new study.
The research conducted by Ernst & Young and NOP shows that complaints against banks are on the increase, however, as customers expect better service from their branches.
The report states that most complaints to relate to charges, mistakes and poor service. Many refer to phone calls routed through anonymous call centres and increasingly complex transactions.
The Banking Code Standards Board revealed in its annual report that complaints about its members rose by 59 per cent to 1,260 cases between 2001/02 and 2002/03.
The Financial Ombudsman Service says complaints about banking services other than mortgages, loans and investment products - for example, clearing cheques, cash machines and money transfers - rose by 85 per cent to 1,485.
More than 22 per cent of complaints lodged with the FSA concerned banks.
However, Ernst & Young claims banks are not going far enough in addressing customer complaints.
The study found that, of those customers who complained, 40 per cent of customers felt worse about their bank than they did before going through the complaints procedure, and 56 per cent of customers complaining to their banks did not even get an apology.
"Many people believe that complaining won't change anything and that the bank does not care," says Philip Middleton, Ernst & Young's head of retail banking. He did stress that the big banks are seeking to address the problem and develop better customer relations.
"In the past 20 years banks have gone from being customer-centric to product-centric. Now they are realising that they can't grow by taking over companies and acquiring new customers. Instead they have to grow by selling more to their existing customer base," Mr Middleton added.
The survey also revealed that, although customers may not complain directly to their banks, eight out of 10 of them voice their dissatisfaction to somebody else, and nearly half of them will tell at least another four people about their grievance.
Customers are also increasingly more likely to switch banks if they experience poor service. "Up to 89 per cent of those dissatisfied with the way their complaint was handled say they are unlikely to consider the bank for future purchases.
"This combination of dormant accounts and imperviousness to cross-selling activities is expensive for banks, and very often they do not even realise it is happening," Ernst and Young explained.