New rules which come into force today mean UK banks are obliged to publish information about how likely their customers would be to recommend their services – including their online and mobile banking, branch and overdraft services – to other businesses.
The measure follows Competition and Markets Authority (CMA) and Financial Conduct Authority (FCA) action which sprang from the results of an independent survey of thousands of personal and small business customers. It will make it easier for banks’ clients to compare offers between different institutions, and is intended to foster greater competition between banks and improve quality of service.
Adam Land, senior director at the CMA, said: “For the first time, people will now be able to easily compare banks on the quality of the service they provide, and so judge if they’re getting the most for their money or could do better elsewhere.
For the first time, people will now be able to easily compare banks on the quality of the service they provide
“This is one of the many measures – including Open Banking and overdraft text alerts – that we put in place to make banks work harder for their customers and help people shop around to find the best deals for them.”
Banks will be required to publish details of the services they offer as well as any relevant customer service phone numbers. They will also have to provide information about the number of major operational and security incidents they have experienced, and provide updates on their websites.
From February 2019, the FCA will expect that banks publish figures on how long it takes to open current accounts and replace debit cards.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “Getting a good deal isn’t just about pricing. It’s also important for customers – including individuals and small businesses – to be able to judge the quality of service around their current account and to see whether other providers could offer something that suits them better. This information should encourage providers to offer the services that people value.”
Demand for technology
The move comes as digital transformation places disruptive technologies such as artificial intelligence and Open Banking in the foreground of the evolving banking landscape.
Dave Anderson, digital performance expert at cloud software company Dynatrace commented: “These rules confirm what we all have known for a long time – users demand websites and apps that work every single time they log on. There is nothing more frustrating than not being able to transact, transfer money, check your balance, or trade.
“Banks’ IT teams are struggling with severe complexity, which is seriously impacting IT performance. More than any other industry, banks still contain a mix of archaic legacy systems, new cloud platforms, and yet are under pressure to accelerate their software development to combat the threat of their ‘digital-first’ competitors.
Under this new scrutiny, it is vital that banks expand their monitoring intelligence footprint
“That is why, under this new scrutiny, it is vital that banks expand their monitoring intelligence footprint and, as IT complexity today is beyond human capability, it’s imperative to ensure AI is at the core. The only solution is to ensure the banks can predict and even prevent problems before end users are impacted, as system outages will now impact a bank’s brand like never before.”
According to Andrew Stevens, financial services expert at software company Quadient, “The arrival of Open Banking has already made it easier for consumers to switch providers and started to show banks that poor customer experience simply won’t be tolerated. Today’s new rules from the FCA serve to really hammer home this point, placing the consumer in an increasingly firm position of power.
“There is no denying that this is a testing time for the financial services industry, but the bottom line is that those who come out on top will be those who continue to prioritise the needs of the consumer.”