Traditional banks and building societies have become the only category of UK financial provider where consumers are more likely to say service has deteriorated than improved, according to research published on Tuesday by CRIF, the credit and decisioning analytics firm.
The findings draw on a survey of 5,000 consumers across five European markets conducted by Opinium Research between March and April 2026. In the UK, 29% of respondents said service from high street banks and building societies had worsened over the past three years, against 26% who said it had improved, yielding a net score of negative three. Digital banks and fintechs recorded a net score of positive 36, with 43% of respondents citing improvement and only 7% citing deterioration.
The service gap in numbers
The table from the CRIF report illustrates a clear hierarchy. Investment and asset management firms scored a net positive 12, credit and lending providers positive nine, and insurers flat. Traditional incumbents stood alone in negative territory. Sara Costantini, regional director for the UK and Ireland at CRIF, said incumbents can no longer rely on scale or legacy to retain customers: “Digital banks and fintechs are setting the standard for what good looks like in financial services, and consumers can see the difference.”
Branch closures are a contributing factor. One in five respondents (20%) said that the reduction in physical branches had made it harder to access support, while 16% said the growth of digital services had itself reduced service quality and 15% believed digitisation had been driven primarily by cost reduction rather than customer benefit. That last figure matters commercially: it suggests a meaningful segment of consumers is sceptical of digital migration as a service improvement rather than a cost exercise.
Despite this ambivalence, adoption of digital-only accounts is accelerating. Separate data cited by CRIF, sourced from Finder, shows that 49% of UK consumers had opened a digital-only bank account by 2026, up from 40% in 2025 and 36% in 2024. The trajectory suggests that negative sentiment about incumbent service quality has not slowed account migration.
Competitive and regulatory context
The findings land at a difficult moment for the major UK retail banks. Branch closure programmes across Lloyds Banking Group, NatWest and Barclays have continued through 2025 and 2026, drawing scrutiny from the FCA and the Treasury Select Committee over access to cash and in-person services. The regulator’s Consumer Duty rules, which came fully into force in 2023, place explicit obligations on firms to demonstrate good outcomes for all customer segments, including those who cannot or will not use digital channels. A persistent negative net service score creates a paper trail that compliance teams will need to address.
For the challenger banks, the CRIF data provides further validation of the positioning that firms such as Monzo, Starling and Revolut have built their growth strategies around. Customer satisfaction has been a primary competitive differentiator rather than product breadth, and the gap shown here reinforces that advantage. The strategic question for challengers is whether a positive service perception can translate into primary banking relationships and the deposit balances and lending volumes that accompany them.
Costantini framed the challenge for incumbents as a dual mandate: “The banks that will win out are those that match the challengers on digital experience without leaving behind the people who relied on in-person services. Customers do not choose between digital and human banking. They expect both.”
The research forms part of CRIF’s 2026 Banking on Banks report series. A second report, due later in October, will examine the financial services gap between consumers and businesses.
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