The Royal Bank of Scotland (RBS) has announced it will invest £700m ($1bn) in to its retail operations between 2013 and 2016 in a bid to improve its dwindling customer service reputation.

According to the he 81% state owned bank money will be spent on refurbishments across its 2,066 strong branch network, faster account opening and simplified mortgage processing.

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The lender has also vowed to overhaul its complaints handling system.

The bank, owner of NatWest and Ulster Bank, intends to consolidate customer data to provide an improved single view of each of its 15m customers across its complete product range.

RBS plans to build a ‘branch of the future’ and roll-out self-service formats for each region, with a strong emphasis on the automation of routine transactions.

In a presentation to investors, Ross McEwan, head of UK retail business at RBS, said he planned to make RBS the best retail bank in Britain.

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McEwan added: "There’s a big space there for it. I’ve not met anyone who believes there’s great retail banking in the UK," he said.

McEwan described online and mobile as "key distribution channels". Over the past year, the bank has seen online sales rise by 25%, with active online banking customer up 11% to 5.2 million.

By the end of 2012 RBS reported mobile usage of 2m, saying its mobile users log in on average six times per week, compared to twice a week online.

The bank is trying to sell off 315 of its branches as part of the condition of its government bailout during the financial crisis.

A planned sale of the branches to Santander fell through in October 2012 over unspecified ‘IT integration’ issues.

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