Checks and balances: Mandatory sector-wide customer surveys were held to help people choose the best bank in Britain. Picture: 123RF/ANDRIY POPOV
Checks and balances: Mandatory sector-wide customer surveys were held to help people choose the best bank in Britain. Picture: 123RF/ANDRIY POPOV

London — First Direct, Metro Bank and Nationwide Building Society came top in Britain’s first mandatory sector-wide customer surveys to help people choose the best bank, with Royal Bank of Scotland at the bottom of the list.

A review of the country’s retail banking in August 2016 by the Competition and Markets Authority (CMA) ordered lenders to publish bi-annual measurements of how customers rate their services.

An independent survey of banks’ customers conducted by GfK UK asked how willing they were to recommend their services to friends and family.

In the first survey published on Wednesday, 85% of customers at First Direct, HSBC’s telephone banking unit, said they would recommend their lender in terms of overall service quality. Metro Bank and Nationwide Building Society came second and third with 83% and 73%, respectively.

The "big four", Barclays, HSBC, Lloyds and Royal Bank of Scotland, whose branches have long dominated Britain’s high streets, scored lower.

At the bottom 

Royal Bank of Scotland was at the bottom of the list in joint 15th place with Clydesdale Bank. Just 49% of their customers said that they would recommend the two lenders.

"For the first time, people will now be able to easily compare banks on the quality of the service they provide, and so judge if they’re getting the most for their money or could do better elsewhere," said Adam Land, senior director at the CMA.

Britain and its regulators are trying to boost competition in banking by making it easier to switch accounts and encouraging new "challenger" banks to enter the market, but so far the "big four" continue to dominate.

"Giving consumers more information about the service personal current-account providers offer will help encourage customers to shop around and find the best account to suit their needs," said Eric Leenders, MD of personal finance at UK Finance, a banking industry body.

Barclays came joint fifth with Santander UK, with 64% of its customers recommending the bank. Lloyds was joint ninth with Natwest, a Royal Bank of Scotland unit, and TSB. HSBC was joint 13th at 55% with the Co-operative bank.

For business banking surveyed by BDRC, Sweden’s Handelsbanken came top, followed by Metro Bank and Santander.

The results must be displayed prominently in branches, and for customers to see when they bank online or on smartphones. The survey is one of several measures imposed by the CMA to improve information. Customers were also asked about service quality in online and mobile banking, branches and overdraft services.

Radical measures

However, legislators have called such measures a "dereliction of duty", saying they rely too much on advances in technology and transparency to boost competition. They have called for radical measures to prise open the sector, such as ending free in-credit banking to stop hefty overdraft fees from subsidising wealthier customers who can stay in the black.

The Financial Conduct Authority is due to publish initial findings from its own review of retail banking business models later this year. Banks will have to publish figures on how long it takes to open current accounts and replace debit cards from February 2019.