Banks have stepped up their customer service game and Forrester Research Group has the data to prove that it’s working.

Forrester’s 2008 Customer Experience Survey ranks consumers’ recent interactions with different companies. Bruce Temkin, VP & principal analyst, customer experience, for Forrester says the survey gauges consumer satisfaction based on the criteria of usefulness, usability and enjoyment.

“This year’s index shows that banks made the largest jump in improvement,” Temkin says. “The survey was sent out at a time when most consumers are extremely concerned about their financial health. What’s remarkable is that they (banks) did so well this year compared to last.”

Temkin says he started seeing improvements about five years ago and that this year’s results reflect several years of hard work. He’s seen larger banks beginning to change their customer service processes, procedures and infrastructure.

“Banks realized that they needed to build an engine for organic growth and recognized that treating existing customers better will lead to finding a way to have customers want to buy more stuff from them,” he says. “The whole discipline of customer experience has become more formalized now and most large banks have a group of executives in charge of customer experience.”

Next year’s results will be include consumers’ reactions to all of the mergers and acquisitions that happened this year.

“I think the smaller firms will show improvements, but we’ve had to go through a lot of hiccups within the last year,” says Temkin.

Although banks made significant improvements in customer service, Temkin says it’s important to note that they still have a long way to go before they will receive excellent marks. National City Bank was the highest ranked bank at number 37 out of the 112 companies surveyed.”

“They’ve made the most notable progress, but they still face a tough reputation,” says Temkin.