Banks and building societies have overtaken retail for customer satisfaction for the first time, according to the latest UK Customer Satisfaction Index.

Retail has traditionally led the index since it launched in 2008, reflecting the sector’s focus on personalisation, competitive service and customer experience.

However, the latest figures from the Institute of Customer Service show banks and building societies have moved into the top spot, scoring 82 out of 100.

Non-food retail scored 81, while food retail came in slightly behind at 80.6.

Nationwide Building Society was named the UK’s top brand for customer satisfaction, with a score of 87.3. It was followed by John Lewis on 87.1 and first direct on 86.

The results underline the continued strength of John Lewis’ service proposition, with the department store chain remaining the highest-ranked retailer in the index.

However, the wider sector has been leapfrogged by banks and building societies, which the Institute of Customer Service said had benefited from greater investment in training, technology and customer retention.

The industry body also pointed to the Financial Conduct Authority’s Consumer Duty rules, introduced in 2023, which require financial services firms to put customers at the centre of product design, communications and support.

Institute of Customer Service chief executive Jo Causon said customer satisfaction in banking had been improving steadily “for some time” after the sector’s reputation was damaged by the financial crisis.

“The sector has led the way in app development, with many providers now offering an excellent digital experience for routine transactional elements combined with well-trained, motivated and empowered employees for more complex requirements,” she said.

“Regaining trust has been paramount.”

The UKCSI, which is published twice a year, tracks customer satisfaction across 13 sectors. The latest results were based on surveys of more than 15,000 UK customers, collected in March and April.

Despite the overall improvement, the index also pointed to signs of pressure on consumer confidence.

The proportion of people who said they felt better off than a year ago fell from 38 per cent in January to 35 per cent, while 36 per cent said now was a bad time to buy major items, up from 31 per cent at the start of the year.

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