UK challenger banks led traditional financial institutions in customer satisfaction in two new reports into banking services.

The findings were laid out in large scale surveys from Ipsos and BVA BDRC, which the Competition and Markets Authority (CMA) requires banks to participate in.

The surveys ranked the banks based on the quality of their personal and business current accounts by asking respondents how likely they would be to recommend their provider to a friend, relative or other business.

They explored the quality of online and mobile provisions, branch and overdraft services and, for small businesses, the quality of the relationship management they receive.

For Great Britain, the results ranked challenger banks Starling Bank and Monzo as joint first for personal current account providers.

First Direct, HSBC’s telephone and internet-based division was ranked third.

For Northern Ireland, Starling Bank and Monzo were both in the top three, with Nationwide joining them.

The results were similar for business accounts – in Great Britain, Starling and Monzo were first and second while Handelsbanken was third. However, neither ranked in Northern Ireland, with Santander and Danske Bank offering the best business current accounts.

The bottoms of the rankings were filled with traditional financial institutions. Royal Bank of Scotland came 16th for personal current accounts in Great Britain, while Bank of Ireland UK and AIB were at the bottom in Northern Ireland.

For business accounts, the Co-operative Bank ranked at 15th for Great Britain and Bank of Ireland UK and AIB came in bottom in Northern Ireland.

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Adam Land, Senior Director at the CMA, said: “As the rising cost of living bites, it’s important that people and businesses have the information they need to manage their money and make savings.

“These results show how banks are treating their customers at a time when many are feeling the pinch.

“When times are tough you find out who’s fighting your corner and if your bank doesn’t match up to the competition – you can vote with your feet and make a switch.”

UK challenger banks have frequently performed well in terms of customer satisfaction. In its 2021 survey, Ipsos Mori rated Monzo as offering the highest quality service, with 83% of respondents saying they would recommend it to family and friends.

In addition, Starling Bank and First Direct came joint second with 81% of people saying they would recommend them.

Typically, these groups performed well based on their online banking and overdraft services and were popular with younger audiences and internet-based companies.

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