The UK’s competitions watchdog has revealed that challenger banks are offering the best customer experience, with a familiar name also getting the best feedback from business users.
Each year, the Competition and Markets Authority (CMA) updates its banking satisfaction tables, based on regular surveys. The survey seeks feedback from both current account and business account holders with 13 published over the past seven years.
More good news for Monzo
In the latest survey there was a clear, standout winner – Monzo. The challenger bank has enjoyed rapid growth and success over the past couple of years, significantly building up its base of both current account and business account holders.
Monzo was ranked first in both categories, with 17 current account providers and 16 business account providers listed. Significantly, the number two and number three spots in the current account category were also held by challenger banks, Starling Bank and Chase.
“To be voted by our customers as the UK’s top bank for overall service for personal and business accounts is not something we’ll ever take for granted,” Lyndsey Edgar, Monzo’s VP of Operations, told Payment Expert.
“We’re on a mission to change people’s relationship with money, and that means being there for our customers every single day. Topping these tables time and time again is recognition of the hard work and dedication of every employee at Monzo and something we’re incredibly proud of.”
Starling was also the second highest ranked business account provider. The third place for business accounts was held jointly between UK fintech Tide and Swedish Nasdaq-listed bank Handelsbanken, the latter waving the flag for the traditional sector.
This isn’t great news for the country’s traditional retail banking space, a multi-billion pound sector and one of the largest banking industries globally. Monzo and Starling, founded in 2015 and 2014 respectively, have risen quickly to challenge the dominance held by the traditional big players.
Even more worryingly for the status quo, Chase is a newcomer to the market, having only launched in the UK in 2021. CMA’s latest survey, covering June to July 2023, is the first to include Chase, showing how quickly the bank seems to have built up a good rapport and image with customers and businesses.
Trad banks playing catchup
In contrast to the challenger banks, some of the UK’s traditional names have not received a warm reception. The three lowest ranked current account providers were the Co-operative Bank, Virgin Money and the Royal Bank of Scotland (RBS).
Both the Co-operative Bank and RBS were also in the lowest three for business accounts, placed 13th and 14th. In the case of the Co-operative, the firm was jointly placed with Barclays, another UK high-street household name.
A similar story was told in Northern Ireland, where the CMA published a separate survey to Great Britain. Monzo again topped the current account league table here, followed again by Starling Bank.
Nationwide was the third ranked bank, whilst the established institutions of Ulster Bank, Bank of Ireland UK and Allied Irish Bank were the bottom three. Santander, meanwhile, was the top rated Northern Irish business account provider, with Bank of Ireland UK the lowest rated.
Although Virgin Money did not receive great feedback in Britain, Nationwide’s Northern Irish performance may indicate that change could be on the horizon for the former. This is because Nationwide is buying out Virgin Money in a £2.9bn deal – if changes are initiated by the new owner, maybe the customer experience can be improved.
Regardless, the data shows that challenger banks are clearly winning the battle for customer hearts and minds. Traditional banks have some catching up to do, although this is something many have recognised over recent years. Chase itself is arguably the best example of this, with the challenger having been established by US veteran banking giant JP Morgan.
“It’s important that banks listen to their customers and then provide services in a way that works for them,” commented Dan Turnbull, Senior Director of Markets at the CMA
“Strong competition is the most effective way to improve the customer service experience, and this survey provides the transparency that people need to be able to choose a new provider if they feel their bank is not up to scratch.”
