New banks must focus on branches and service
Customer service the key for new banks
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Tuesday, 03, Nov 2009 07:14
New banks coming onto the UK market need to focus on customer service.
As Lloyds Banking and Royal Bank of Scotland start to cut off branches and the government hopes new entrants will step into market, research points to customer service being key to success.
A study by Deloitte found 53 per cent of Brits said they would only place savings with a bank with branches they could visit.
Furthermore the importance of service leads 66 per cent to have their current accounts where they can have the best service, while only 30 per cent look for the best service.
Neil Tomlinson, head of retail banking consulting at Deloitte, explains 65 per cent of customers would only take a mortgage if there is a branch.
As the government looks to cut up RBS and Lloyds Banking's high street activity, any new entrants in the market must focus on service, branches and face-to-face contact, he claims.
"The best deal for consumers is not just the interest rates, the best deals are about satisfaction.
"Twenty-one per cent of customers have moved due to dissatisfaction over the last two years."
He added if any new names come onto the bank market, existing big banks "will have to up their game".
"If we see evolution, it is going to force everybody up. They will have to think about what the customer wants and given them more choice."
Mr Tomlinson added banks that can provide longer opening hours would also benefit as would any new entrant that could offer a wide number of branches.
"The important thing is accessibility and delivering service, not the size of the bank," he said.
Reports over the weekend pointed to Lloyds Banking cutting off and selling branches and business under the old TSB brand, while RBS is thought to be reviving old brands for a sell off.
Tesco and Virgin Money have both been connected with expansion, with Tesco's banking services using supermarkets as branches seen as the future for the retailer.