If you visited a bank branch last week you may have noticed a change since your last visit. Since August 15th, the UK's retail banks have been forced to display league tables disclosing how they rank compared to their peers when their own consumers are asked whether they would recommend their bank to their friends or family.
This new approach, pioneered by the Competition and Markets Authority (CMA), is intended to have a two fold effect. Firstly, it is designed to embarrass and pressure low ranking banks to up their game, and provide them with an impetus to improve their customer service. Secondly, it provides consumers with an easy to understand metric to help them understand how their bank compares to others when it comes to customer service. The CMA hopes that consumers will use this information when weighing up whether to open an account with a particular bank or when considering switching their account to another provider.
While the rules require that banks display these league tables "prominently" in branches, online and in their mobile apps, the Times article quoted below suggests that some of the in-branch posters are not in places many consumers would read them. There is also the wider question of how important consumers consider 'customer service' to be when compared to other factors which may drive them to choose a bank, for example, the interest rate they may receive or the bank's overdraft costs and charges.
While this remedy cleverly targets both the demand and supply side of the market, it remains to be seen as to whether it will actually drive a change in behaviour from either the banks or consumers.
Both the CMA and FCA will be watching the market closely to see how things develop, and if effective, then as the Times article suggests, we could see them look at how these league tables could be used in other industries too.
Since last Wednesday, all the main retail banks in Britain have been forced to display, in their branches and on their websites, league tables ranking the best banks for customer service in personal banking and disclosing their own position in those league tables.