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Best and worst banks: how customers rate their service

Best and worst banks: how customers rate their service

A survey has revealed which banks are most likely to be recommended based on their quality of service, online and mobile banking, and complaints handling.

John Fitzsimons

Banking and Borrowing

John Fitzsimons
Updated on 18 August 2022

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%


What’s immediately noticeable is how well the online banks are performing.

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%


It’s a similar story, perhaps unsurprisingly, when looking at the online and mobile banking ratings.

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%


There are some familiar names at both ends of the table here.

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%


This article contains affiliate links that mean we may be paid if you take out one of the products. However, we wanted to stress this article is editorially independent. 

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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