Thousands flee TSB amid IT fiasco
More than 21,000 TSB customers ditched the bank between April and June during the height of its online banking chaos, official statistics reveal.
Switching figures from Bacs show that in the three months to June, TSB lost 21,790 customers. However, it gained 5,149 during this time, leaving it with a net loss of 16,641 accounts, a lower number than expected by banking experts.
TSB suffered an IT meltdown in April following a bungled systems upgrade, causing customers to be locked out of their accounts for weeks, while a number also fell victim to fraud. The chaos led to CEO Paul Pester stepping down last month.
The bank tried to regain favour with customers by waiving fees and interest on overdrafts and upping the interest rate on its Classic Plus Account from 3% to 5% but it seems this wasn’t enough to stop people flocking to the exit.
However, away from the Bacs figures which capture movements under the Current Account Switch Service (CASS), TSB said that in Q2 it actually saw more than 20,000 people open current accounts.
A spokesperson said: “The number of people who use the CASS is only part of the total picture. During the three months in question we actually saw more than 20,000 customers either open a new bank account at one of our branches or switch their account to us using the CASS system.”
Big banks lose out
Elsewhere, the current account switch figures reveal that RBS suffered a net loss of 12,362 customers, while NatWest saw a net loss of 12,053 accounts.
HSBC gained the most customers – 51,441, perhaps off the back of its £200 current account switch incentive launched in May. But when taking into account losses, it was left with a net gain of 25,605.
The real winner was Nationwide Building Society which gained 45,060 customers while losing 10,483. This meant it had the highest net gain at 34,577 customers.
For the first time, app-based challenger banks Monzo and Starling also disclosed their switch figures. Monzo came in third place of the highest net gains, having recorded 2,702 new accounts, while Starling saw 1,737 net gains between 1 April and 30 June 2018.
Andrew Hagger of independent comparison site Moneycomms, said: “As expected customers voted with their feet on the back of the TSB IT fiasco. The only real surprise is that this figure wasn’t much higher although the discontent could rumble on and we may yet see a similar outflow of accounts when the next quarterly figures are released next January.
“It was another excellent result for Nationwide Building Society – it’s easily been the most consistent switching performer for the last 2.5 years, with a minimum 25,000 net switchers every quarter.
“Monzo and Starling Bank both outperformed banking giants including Halifax, Lloyds Bank, NatWest and Barclays. It’s a sign that trust is building in new tech challengers and hopefully they will continue to grow and become a greater force in the current account market.”
The Bacs figures also revealed that in the year to September 2018, a total of 941,122 current account switches took place. Since the Current Account Switch Service launched in 2013, more than five million switches have been processed.