Banks Overtake Retail in Customer Satisfaction: Nationwide Tops UKCSI

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 in the UK Customer Satisfaction Index (UKCSI) since its launch in 2008. Nationwide scored 87.3 out of 100, followed by John Lewis (87.1) and first direct (86.0).

Most Improved Brands

The most improved brands include OVO Energy, which rose 7.9 points year-on-year, Northumbrian Water (up 7.3 points), and Land Rover (up 7.1 points).

Retail Sector Decline

Retail had led all sectors for customer satisfaction since the UKCSI began. Analysts noted that some companies struggled to differentiate their customer service online, while delivery partner failings dented the overall experience for shoppers.

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Financial Services Rise

Meanwhile, banks and building societies have placed growing emphasis on customer satisfaction, loyalty, and retention. The data shows a significant rise in sector performance since the introduction of Consumer Duty in 2023, which made it mandatory for financial services firms to focus on customer outcomes.

Overall Satisfaction Trends

The index reveals a fourth consecutive increase in customer satisfaction, reaching 78.3 out of 100, a 1.0-point rise year-on-year. However, the rate of increase has slowed, with the index just 0.1 higher than six months ago.

Jo Causon, CEO of the Institute of Customer Service, said: “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. It’s also likely that Consumer Duty has played a role in ensuring financial services businesses focus on the customer experience, specifically in the boardroom.”

Consumer Confidence

The UKCSI also tracks consumer confidence. 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 year’s time has dropped from 43% to 39%.

Causon added: “The latest UKCSI reveals a levelling off of the customer satisfaction increases we’ve 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 Nation’s 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.”