There is an element of customer inertia, I agree, since most of TSB’s customers did originally come from Lloyds TSB - so they are arguably unlikely to leave no matter what.
However, TSB has until very recently been quite branch-focused. It had the slogan “local banking for Britain” (meaning a local branch), it had local phone numbers to make calling your branch easy and it’s poor technology made applications impossible unless done in branch in many cases.
Also, given TSB’s relative lack of merits other than branch access, those who joined and actively chose TSB (rather than being migrated across) arguably did so, in many cases, for that branch access. I also agree with you that to be the first bank in the U.K. to announce “that’s it, we are closing all our branches and going digital-only” wouldn’t go down well with regulators! I could imagine a scenario where Virgin Money, for example, or Nationwide or Co-operative Bank acquired TSB and then sold other parts of the business off as a side-deal. Monzo might then be interested in buying something like their credit card portfolio, but again I think regulators would scrutinise even that kind of deal quite carefully.
It would be hard to argue that going digital-only wasn’t restricting customer choice, so there would probably be onerous conditions on the deal around maintaining some access to in-person service (such as via the Post Office).
Have you stats on this? I think we’re in danger of being a bit too black and white here. For example, I joined TSB for a bit as they were paying 5% (I think) on current account balances.
It’d be interesting to see TSB customer numbers now vs when they were carved out of Lloyds. I suspect (but don’t know) they’re broadly flat, which would suggests that they’re either inactive accounts or those suffering from inertia for whatever reason (and that might include the fact that the branch is at the end of their road).
If you have the figures to show that their customer numbers have significantly increased then that would be interesting and might point to branches being a factor. But I’m sceptical tbh.
No, of course not. It’s not like TSB even ask you why you are joining them, so definitive data would be impossible to compile!
The closest thing we have to figures on customer numbers is switching data for how many people switched in and out. As a loose proxy for their overall customer base, this would indicate that customers have been in decline - 80,000 customers left in the wake of their IT issues. That does suggest to me that perhaps those that did stay were less concerned with technology, as they accessed their money via a branch. It’s perfectly possible that I’m reading too much into it, but my inference is that’s likely to be the case.
They were - it was 5%, then 3%, then back to 5% for a short time as a “thank you” to customers for staying with them after the IT problems; after Paul Pester left it was then cut to 3%, 1.5% and finally 0% in fairly quick succession in order to cut costs. I may have got that slightly wrong but I think my figures are correct.
No TSB current accounts pay interest today, and their savings rates are also extremely poor.
Their app offers no frills at all, and their online banking is still unreliable even years on. Many of their branches have also been closed.
Objectively, there are few reasons to stay with them.
I joined TSB for the 5% interest too, and back then you were allowed two accounts (later reduced to one) so it was better than any other bank at the time.
The only incentive to have a TSB account now is the £5 per month cashback on the Spend & Save account, but for that you have to make 30 debit card payments each month, and you only get it for the first six months unless you have the Spend & Save Plus account, for which there’s a monthly fee.
TSB originally ran on a copy of Lloyds’ systems but when they switched over to Sabadell’s newer, and supposedly more advanced, systems it all went downhill. I wasn’t affected by the migration meltdown, thankfully, but TSB’s current online banking and app are both very poor compared to the Lloyds ones.
I agree, but that’s so limited that’s it’s probably not worth it for most people.
Yes, but unfortunately they ran on a “frozen in time” version of the systems - so from day 1 they were left behind as Lloyds continued to develop new features. The Sabadell migration appeared to corrupt so much data that there isn’t much hope of their platform ever being properly stable, and the system is so buggy that developing new features is also difficult. Sabdell’s new system was rushed and rolled out when not ready - and there is no going back now.
The LBG systems are terrible and there are so many!
I work credit cards and we use a minimum of 5 (5th being edge browser which you then use around 4 different browser based systems, and their main host tool)
Microsoft Edge, high tech! I thought you were going to say Internet Explorer with Active-X controls!
What was unforgivable was that Lloyds offered to help TSB when the migration went wrong, as they clearly intimately knew the intricacies of the Lloyds systems and thought they could help figure out what went wrong, but TSB refused the offer.
Sabadell’s Spain-based IT people (Sabis) then couldn’t fix the problems and they had to call in IBM.
This is true, but it’s a complete headache for us on frontline to check multiple systems for bits of information for an account as it’s not all in one place.
Anyone who has called a bank call centre will be vaguely aware of this as they will have had to wait while the employee has checked various systems for things!
I think they’re slowly trying to make it run through less systems but because they’re such an old set up it will take a very long time to avoid the TSB fiasco
We forget about LBG in the TSB crisis. If you’re running Lloyds and see disaster on the back of migration away from your current tech you’ll be wary about doing anything that might result in the same thing.
(Of course, the best response is actually to develop a plan to move away quickly but not big bang, but that’s almost certainly not the lesson they took away from it).
It’s getting there, we have CAT (colleague assistant took) which will show us all linked accounts and general information (payments, due dates, arrears etc) but then statements in other systems, two debt manager systems (colls and recoveries), and then whatever else depending on product.
Their host credit card system is basically teletext by sight a mine field when first using it.
A friend of mine who works for Santander told me that he works with a mixture of different systems inherited from Abbey National and Alliance & Leicester etc.
It’s a situation that likely affects a lot of large companies, not just the banks. When I worked for a major energy provider a few years ago we had one system for gas, another for electricity etc.
I also wonder what impact TSB’s chief executive moving to Nationwide would have on any potential deal. In theory, it would probably make things that bit easier considering she would have key knowledge of both businesses. Obviously the businesses aren’t ran by just one woman, but it would probably help nonetheless, even if just by a small amount.
a mine field when first using it.