NCSI-UK News Third Quarter 2013
National Customer Satisfaction Index Results: Retail Banks, Credit Card Providers, Home and Motor Insurance Companies and Mortgage Lenders
LONDON (December 4, 2013) – Customer satisfaction at the national level slipped 0.1% in the third quarter of 2013, according to a report released today by the National Customer Satisfaction Index (NCSI-UK). The index is currently 75.1 on a 1-100 scale. The latest NCSI-UK report covers consumer survey results for financial services including retail banks, credit cards, home and motor insurance, and mortgage lenders.
The launch of the UK Current Account Switch Service has challenged banks to improve service and value in order to keep their customers, but according to current account holders, the industry is no better than it was a year ago. Customer satisfaction with retail banks is stagnant at an NCSI benchmark of 74, below the national average.
Among the High Street banks, HSBC (including First Direct) continues to distinguish itself with superior service, and improves yet again this year (+ 4% to 78), matching smaller banks and building societies.
“Smaller financial institutions have always had high customer satisfaction because they offer more personalized service,” says Claes Fornell, ACSI founder and chairman. “However, an influx of new customers will pose new challenges, making it more difficult to sustain high service levels.”
After reaching a record-breaking score of 81 in 2012, the combined score for smaller banks and building societies, including the beleaguered Co-operative, retreats 4% to 78. Barclays edges up 1% to an NCSI score of 74, overtaking Lloyds Banking Group, which slides 1% to 73 ahead of the re-launch of TSB. Santander and RBS remain the lowest-scoring retail banks, but for the first time in six years, Santander advances from last place (up 3% to 72), as RBS Group falls behind (down 1% to 71).
After reaching an all-time high a year ago, customer satisfaction with mortgage lenders slips 1.4% to 73. Nationwide bucks the industry trend, rising 1% to an NCSI benchmark of 79. This is the sixth year of steady improvement and a record-high for the building society, which posted a 155% profit rise in the first half of the year.
In second place, Barclays also shows improvement, up 3% to 76. The aggregate of smaller mortgage lenders and building societies is down 1% to 74, tied with Lloyds Banking Group (unchanged). RBS Group (+4%) and Santander (unchanged) remain at bottom of the industry, both at 71.
Customer satisfaction with credit cards is up 1.3% to a benchmark score of 77, a six-year high for the industry, as card providers offer increasingly competitive deals. Card usage has increased by 6% and the level of borrowing is 4% higher than the same period a year ago. The large banks all register some improvement in credit card satisfaction, but smaller issuers and store cards have lost what was once a large lead over big banks.
HSBC improves by 5% to 78. Smaller credit card issuers have always led the category, but ebb slightly this year to tie HSBC at 78. Barclays gains 5% to 77, followed by RBS Group (+3%) and Lloyds Banking Group (+4%) at 76.
Home & Motor Insurance
Customer satisfaction with home and motor insurers is up 1.3% to 77. Online insurance aggregators are a major reason for rising satisfaction as they provide quick and easy access to comparative prices across a range of companies, making it easier to find and customize coverage to meet needs and fit budgets.
Among the larger insurers, Aviva jumps to first place (+4% to 78). This is the largest gain of the year, and a record high for Aviva. Smaller home and motor insurers once held a healthy lead in customer satisfaction, but are now stalled at 77 for the second year in a row. Churchill Group and Direct Line both edge up 1% to 77, tied with RSA Group. Zurich follows closely behind, up 1% to 76.
About NCSI-UK (www.ncsiuk.com)
The National Customer Satisfaction Index (NCSI-UK) is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United Kingdom, and is produced by the American Customer Satisfaction Index (ACSI). Results are based on survey data from more than 5,750 customers collected via online panel during Q3 of 2013.
This methodology was developed at the University of Michigan and has been adopted worldwide as a leading macro- and micro-level indicator by universities, governments, and countries including the United States, the United Kingdom, Sweden, Singapore, Korea, Turkey, South Africa, Mexico, Colombia, Dominican Republic, Indonesia, and Barbados.
According to research from the University of Michigan, customer satisfaction – as measured by the NCSI-UK and ACSI – is directly linked to stock market performance. Companies with high scores on the ACSI and NCSI-UK produce higher stock returns than competitors and greatly outperform market indices.