Best and worst banks: how customers rate their service

There’s more to picking a bank account than simply identifying the deal with the best interest rates or overdraft on offer.

You also need to think carefully about which bank will deliver the best level of customer service.

A good place to start is the biannual research into the issue from the Competition and Markets Authority (CMA).

People with personal current accounts were polled on their experiences with their banks by Ipsos MORI on behalf of the CMA.

They were asked questions on things like the quality of online and mobile services, their experiences in branches, what the overdrafts are like, and importantly how likely they would be to recommend the bank to a friend, relative or business contact.

The various providers are then awarded a percentage score, based on that feedback.

According to the CMA, the idea is that these rankings will make it easier for individual banking customers to compare the various banks and help them choose where to keep their money.

What’s more, the scores should drive up competition, meaning we all enjoy a better experience from our banking.

Let’s take a look at each of the main categories and how the various names performed.

Overall service quality

This category is the big one really and relies on the questions around how likely we would be to recommend our bank to someone else.

Here’s how the top and bottom five scored:

Best banks	Score	Worst banks	Score
Starling Bank	81%	HSBC	54%
Monzo	81%	Co-operative Bank	53%
first direct	78%	TSB	50%
Metro Bank	72%	Virgin Money	49%
Nationwide	68%	Royal Bank of Scotland	46%

The top three slots are all taken by banks without a physical presence to speak of ‒ two of the big app-based banks in Monzo and Starling Bank sharing top spot, followed by the innovator of online banking, first direct.

There seems to be a pretty clear message here.

These banks aren’t burdened by cumbersome legacy tech that holds back the big high street banks, and so have been able to make the most of emerging technology to deliver a banking service that people actually value.

With first direct, for example, there has always been a big focus on customer service.

Indeed, it wins virtually every customer service award going, year after year - and it's currently offering a whopping £175 to any new customers who open an account (apply for a first direct account here).

Monzo and Starling meanwhile have been the trailblazers in app-based banks, providing not only fantastic functionality but services that younger bankers, in particular, are more likely to value, such as fee-free use overseas.

Little wonder that so many users are happy to recommend them to all and sundry. Having had a Monzo account myself, I’d have no hesitation in recommending them.

At the other end of the table, it’s a different story.

All of those banks are likely to be found on the high street, but clearly having a branch to head to isn’t enough to make up for the various other failings on show.

Fancy joining Starling? View their current account here

Online and mobile banking services

Over the last couple of years, many of us have been entirely reliant on online and mobile banking when it comes to managing our money. So having a bank that performs well in these areas is invaluable.

Here’s how the top and bottom performers scored according to the CMA poll:

Best banks	Score	Worst banks	Score
Starling Bank	85%	Royal Bank of Scotland	66%
Monzo	83%	HSBC	66%
Halifax	79%	TSB	63%
first direct	78%	Co-operative Bank	63%
Lloyds Bank/Bank of Scotland	77%	Virgin Money	61%

We have the three online-only banks in that top five, joined by Halifax and Nationwide who ‒ though they are high street mainstays ‒ have spent a lot of time and money developing cracking online services.

Clearly, that has led to a much-improved experience for customers compared to those at the bottom end of the table.

Fancy joining Starling? View their current account here

Overdraft services

The overdrafts offered by the nation’s banks have been called into action more than expected in recent times, due not only to the pandemic but also the cost of living crisis.

So having a bank that handles it well when their customers drop into the red is important.

Here are the best and worst banks according to the poll:

Best banks	Score	Worst banks	Score
first direct	74%	TSB	53%
Metro Bank	70%	Virgin Money	53%
Starling Bank	69%	Co-operative Bank	52%
Monzo	64%	NatWest	47%
Lloyds Bank	62%	Royal Bank of Scotland	43%

Yet again the online banks have performed well, while the likes of TSB, RBS and Virgin have left their customers feeling frustrated.

Branch services

Finally, let’s see how the various banks performed on branch services. 

Obviously, this is one area where online banks can’t compete, so if banking in person is important to you, these are the names to bear in mind.

Best banks	Score	Worst banks	Score
Metro Bank	79%	Co-operative Bank/NatWest	59%
Nationwide	72%	HSBC	58%
Halifax	69%	Virgin Money	54%
Lloyds Bank	68%	TSB	53%
Bank of Scotland	67%	Royal Bank of Scotland	51%

The banks that make you happy

Of course, the CMA and Ipsos are not the only ones trying to get to the bottom of which banks and building societies deliver the best level of service to their customers. 

It’s also worth checking out the poll by consumer group Which? of its members, who are asked to rate their banks based on a range of criteria, such as customer service, handling complaints, online banking and their mobile app. Some banks were also rated for their service in branch and telephone banking services if they offer them.

Which? also tasked its own in-house experts to give the banks a rating based on the standard of products they offer and combined those various scores to provide an overall rating.

Here’s how the banks shaped up across some of those categories, and their final score.

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Bank	Customer service	Complaints handling	Mobile app	Product rating	Overall score
Starling Bank	5/5	-	5/5	73%	85%
Monzo	5/5	-	5/5	64%	83%
Triodos	5/5	-	3/5	57%	83%
first direct	5/5	5/5	4/5	93%	82%
Revolut	4/5	-	5/5	63%	78%
Metro Bank	5/5	4/5	4/5	65%	77%
Nationwide BS	5/5	4/5	4/5	75%	75%
Cumberland BS	5/5	-	-	53%	73%
Smile	4/5	-	-	63%	72%
Co-operative Bank	4/5	4/5	3/5	57%	70%
Halifax	4/5	4/5	3/5	77%	67%
NatWest	4/5	3/5	4/5	78%	67%
Lloyds Bank	4/5	3/5	3/5	80%	66%
Santander	4/5	4/5	3/5	76%	66%
Barclays	3/5	3/5	4/5	81%	65%
Bank of Scotland	4/5	4/5	3/5	77%	64%
Virgin Money	3/5	3/5	3/5	70%	63%
TSB	3/5	3/5	3/5	67%	59%
HSBC	3/5	3/5	3/5	75%	57%
Royal Bank of Scotland	3/5	3/5	3/5	78%	56%

A few things stand out immediately from the results. It’s notable that while customers were effusive in their praise for the top three, Which? didn’t receive enough responses from those customers about complaints handling.

That could be taken as a real positive, that few of their customers feel compelled to complain about the service they have received.

It’s also worth highlighting how well challenger and app-based banks perform against their high street rivals. 

The bottom of the table is dominated by the big names in stark contrast to the top of the table ‒ none of the top five even have a branch network, for example.

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