How Can Retail Banks in the UK Restore Customer Confidence - Dissertation Example

Customer satisfaction in UK Retail Banks has been damaged by the recent recession whether by force of circumstances following the argument of banks or by malpractices resorted to by banks. The Financial Services Authority had fined the Royal Bank of Scotland and the National Westminster Bank £2.8 million for the reason that these two banks were discovered to have mishandled their customers’ complaints. It was said that more than half of those who complained were left unresolved. (FSA 2011a)The criteria for complaints consisted of (1) the time it took to give the customers due to response to their complaints, (2) the poor quality of services in researching the customer’s issues, (3) incomplete handling of the complaints because the explanations were lacking, (4) failure to offer customers the option to avail of the Financial Ombudsman Service that customers are entitled to receive but customers were not made aware of, and (5) lack of fairness.

The FSA also discovered that the banks did not train their personnel to handle complaints properly. They did not monitor the effectiveness of handling customer complaints. And they failed to ensure that the complaints of the customers were adequately reviewed. Fines amounting to £ 4 million were reduced by 30% because the banks agreed to pay the fine rather than contest the findings. In short, the banks were guilty of poor customer service.Furthermore, the FSA (2011b) discovered how Barclay resorted to banking malpractice by giving its customers wrong investment advice that made them lose their deposits.

Barclay was fined by the FSA £ 7.7 million and was required to pay £60 million for customers. FSA requires banks to give the proper advice based on the “customer’s financial circumstances, their attitude to risk, and what they hope to achieve by investing.” (FSA 2011b)FSA clarified (2011b) why Barclay was fined by saying, “On this occasion, however, Barclays failed to do this for thousands of investors, many of whom were seeking to invest their retirement savings, have suffered.

To compound matters, Barclays failed to take effective action when it detected the failings at an early stage.”