Reputation is vital for success in banking

Comtex News Network

Sep 28, 2012 (Datamonitor via COMTEX) --Consumers are increasingly influenced by the reputation of banks when choosing to purchase a product. Banks with tarnished reputations will find it more difficult to acquire new customers.

Datamonitor's Financial Services Consumer Insight survey reveals that, when choosing to open a current account with a new bank, 78% of UK consumers believe that it is essential for the bank to have an untarnished reputation. This is up from 53% in 2011, which indicates that recent banking scandals have resulted in more consumers wanting their banking provider to have an unblemished history of service.

According to the latest Financial Services Authority figures, complaints made against financial services providers jumped 59% to reach 3.58 million over the first six months of 2012, compared to the previous six months. The increase was largely due to a 129% rise in payment protection insurance (PPI) complaints. However, even when PPI is excluded the complaints made against core banking products increased by 5% to 828,040.

With PPI excluded, Santander and Barclays received more complaints about their banking accounts than any other bank. Santander has a history of receiving a high level of customer complaints; however, it has recently increased investment in its IT infrastructure and customer service, which should see complaints fall in the future. The high level of complaints made against Barclays is surprising as it has not suffered customer-facing service failures, which have affected some of its rivals. The Libor rate-fixing scandal did not impact customer banking accounts directly, but it has damaged customer perceptions of the company. As a result, Barclays could see an increase in complaints in the second half of 2012, as some of its customers will complain about issues they previously would not have raised.

For further information, please contact Far Rahim at frahim@datamonitor.com.

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