Tesco Bank has been rated the most improved bank or building society by the latest survey from the Institute of Customer Service.

The UK Customer Satisfaction Index canvassed 10,000 consumers about their views on 200 organisations spread across a whole range of sectors.

Tesco Bank was named the second most improved organisation overall in the UK, behind Welsh Water. It registered an increase of 6.7 percentage points compared to last year, scoring a customer satisfaction rating of 82.7.

Santander also rounded out the top ten, securing an extra 3.6 percentage points to register a score of 77.4.

In terms of the highest rated organisation in the UK, John Lewis came out top this year, with a customer satisfaction level of 87.7, closely followed by last year’s winner Amazon, on 87.6.

First Direct came third, with 86.3, then Tesco Mobile on 85.8. Nationwide and the Co-operative Bank were equal tenth, reporting scores of 83.5.

However, across the economy, customer satisfaction levels took a dip this year, explained Jo Causon, CEO of the Institute of Customer Service.

“There are a number of factors that could be influencing the downward trend in satisfaction. Customer expectations are rising and their needs are changing more quickly, with speed, convenience and being easy to do business with particularly important,” said Causon.

“In this environment, organisations must invest in customer insight and apply it with agility. They will also need continuously to review their customer service skills, capabilities and standards to ensure they are relevant to changing customer needs.”

Commenting on Tesco Bank’s elevation in this year’s index, Mike Davies, GMC Software Technology’s vice president EMEA North, said the result should be a worry for the High Street incumbents.

“Retailers lead with customer service and know how to keep customers coming back for more,” he argued. “Banks, however, have a long standing reputation for poor customer service in the UK. With challenger banks focusing on customers, as the UK CSI research shows, customers are more apt to switch to a bank like Tesco.”

“What we are seeing is the rise of the customer bank,” he continued. “The big names need to react and improve customer service and communication in order to compete, just as retailers have been doing themselves for years.”

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