Banks: The Worst Brands in Britain?

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Improving the negative perception of banks is one of the most thankless briefs in marketing. But, as Paul Whitfield reports, new technology and online entrants are driving a substantial rethink in customer service and branding in the finance sector

The modern high street bank has something of an image problem. Technological innovation has driven service provision and product development faster in the financial sector than in almost any other, but customer expectations - and levels of satisfaction - have failed to keep up.

Fears and prejudices inherent in the bank/customer relationships are headline news again with Barclays' proposed [pounds]1 surcharge for cash machine withdrawals by other banks' customers.

Last week's 11th hour decision to delay the charge, under threat of legal action by Nationwide, is unlikely to have salved public feelings that the banks are playing games, which pay scant respect to the consumer.

Adding to people's frustration about their banks has been the fact that moving your account has long been almost impossible. Banks made it difficult, because every direct debit or standing order would have to be switched. The cliche is that you're statistically more likely to get divorced than to move your bank account.

Account transfers

But this week all that changes when a government initiative will make it easier for unhappy customers to take their business and money elsewhere.

A directive from the recently established government commission Bacs, means the central system which operates direct debit and standing order payments, will require a test group of banks to allow details of such payments to be transferred between themselves automatically.

This will dramatically simplify the process of changing accounts and should worry the banks, which know current accounts remain the foundation of their customer base.

The government and consumer groups believe this move will force the banks into a fundamental …