Payment protection insurance (PPI) is still the most complained-about bank product, and pushed the number of complaints received by financial institutions up by 3 per cent in the first half of 2011.

According to new figures from the Financial Services Authority (FSA), the number of cases relating to PPI rose by 23 per cent to 531,667. Banks say they expect the volume of PPI complaints to continue to rise throughout 2011, as more individuals realise that they were mis-sold the loan insurance.

Banks have set aside more than £7bn to compensate customers who were mis-sold PPI policies, which were supposed to cover repayments if a borrower lost a job or fell ill.

However, disputes related to bank accounts and services fell, suggesting that banks have made improvements to their customer complaints handling.

Advisers said that while PPI remained a serious problem, there was evidence that financial companies were taking complaints more seriously and attempting to address problems earlier in the process. Banks including Santander and Lloyds have publicly addressed theneed to make improvements in complaint handling and have put new systems in place.

Barclays once again emerged as the financial institution which attracted most complaints, notching up more than 251,000 between January and June. Lloydsand Santander received the second and third-highest levels of complaints.

But Barclays upheld slightly more complaints than the rest of the industry, finding in favour of customers in 53 per cent of cases, compared with an industry average of 50 per cent.

It also had fewer cases forwarded to the Financial Ombudsman than Lloyds Banking Group.

Financial companies are required to publish the total number of complaints they receive every six months, following a ruling by the FSA in 2010