Britain's banks are starting to mend their reputations

In line with the general population, personal finance journalists (PFJs) have dramatically improved their expectations for the British economy. In 2014, 80% of PFJs expect the economy to improve over the next year. This optimism may be a contributing factor to journalists’ improving outlook for the retail banking sector. 39% of PFJs now expect the reputation of the sector to improve over the coming year, far more than in 2013 when just 9% expected an improvement. However, it would be an oversimplification to say that this change in opinion is solely based on expected economic improvements. The factors that positively influence PFJs judgement of companies tend to be a combination of providing a strong focus on excellent customer service, and also being seen to provide best-value products for customers. Recently Britain’s banks have been doing more to address these expectations. Brands such as First Direct and Metro Bank have been continuing to push their customer-service credentials, having the customer at the centre of their overall brand proposition. At the same time, there have been a range of new current accounts providing better overall value for customers through more inventive uses of cash-back schemes and stratified interest rates (Santander 123 account, Halifax Rewards Account, Club Lloyds current account, TSB Classic Plus account, etc.). The combination of this changing focus in the market, with the improving economic indicators (and a lack of recent scandals in the sector), may be starting to address some of the more vehement journalistic complaints about the retail banking sector. This may also be having an impact on expectations for the building societies. If banks continue to provide best-value products with a stronger customer focus, they will be moving into a brand space traditionally seen as the heartland of Britain’s building societies. We may already be seeing the impact of this as PFJs expectations for building societies has actually dipped slightly (24% expecting an improvement this year compared to 35% last year). Whilst the retail banking sector has a long road to walk before it reaches a full recovery in the public consciousness, it is now starting to move in the right direction amongst the country’s financial media. If more banks can demonstrate how they value their customers through top quality service and best-value products, they can continue and even accelerate this recovery. “For far too long financial services [companies] have let down customers with appalling service. It’s going to be a very competitive marketplace and it’s going to be those organisations that have a commitment to outstanding customer service that are going to rise above the rest and we’re seeing demonstrable proof that those organisations that have invested in customer service are beginning to take a greater share of the market.” Personal Finance Editor, National Newspaper Research Technical Note: 179 Personal Finance Journalists were interviewed face to face by Ipsos between 5 March and 8 April 2014.