Thousands of TSB customers switched away after IT meltdown

Thousands of TSB customers switched away from the bank between April and June as the repercussions of its IT meltdown were felt, figures show.

Figures for the second quarter of 2018 show that, among those customers using the seven-day current account switch service (Cass), TSB made a net loss of 16,641 current account switches – with 5,149 switches being made to the bank during the second quarter of 2018 while 21,790 customers switched away from it.

The figures include people, small businesses and small charities using Cass, which automatically redirects outgoing and incoming payments to the new account and guarantees people will not be left out of pocket if anything goes wrong.

The figures do not include switches made by customers outside of Cass, so do not capture the total number of account changes made.

TSB said the figures only show “part of the total picture”, and added it had welcomed more than 20,000 new customers during the period.

A TSB spokeswoman said: “The number of people who use the current account switching service 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.”

The Cass figures, which are supplied on a voluntary basis by banks and building societies, also suggest HSBC, Nationwide Building Society and a clutch of newer market challengers were among the “winners” when it came to customers looking for a new provider in the second quarter.

The figures are published by payments body Bacs, which oversees Cass. They show HSBC made a large net gain of 25,605 switches to it – while Nationwide made an even bigger net gain of 34,577 switches.

First Direct, which is an HSBC brand, often tops customer satisfaction surveys and it recently revamped its perks for customers looking to switch.

Starling Bank made a net gain of 1,737 switches from customers using Cass, while Tesco Bank made a net gain of 567 switches.

GAINS:
  • Nationwide
  • HSBC
  • Monzo Bank
  • Danske
  • Tesco Bank
  • Halifax
  • Bank of Scotland
  • Starling Bank
LOSSES:
  • TSB
  • RBS
  • NatWest
  • AIB Group (UK) plc
  • Bank of Ireland
  • Barclays
  • Clydesdale Bank
  • Co-operative
  • Lloyds Bank
  • Santander
  • Ulster Bank

Monzo, which describes itself as “a bank that lives on your smartphone” also made a net gain of 2,702 switches – while established high street names such as Lloyds Bank, Santander RBS and NatWest made net switching losses.

Finance expert Andrew Hagger, founder of Moneycomms.co.uk said: “As expected customers voted with their feet on the back of the TSB IT fiasco.”

He continued: “The discontent could rumble on and we may yet see a similar outflow of accounts when the next quarterly figures are released.”

Referring to brands such as Monzo and Starling Bank outperforming high street giants in terms of net gains in the Cass figures, Mr Hagger said: “It’s a sign that trust is building in new tech challengers.”

TSB’s woes started in April after a bungled IT migration left people unable to access their accounts.

Up to 1.9 million people using TSB’s digital and mobile banking found themselves locked out of their bank accounts following the migration of customer data from the IT system of former owner Lloyds to a new one managed by current owner Sabadell.

Further problems followed, with the Treasury Committee hearing that the bank was overwhelmed by reports of fraud from customers as the chaos continued.

Some customers who moved away from TSB found their direct debits had been cancelled after firms were apparently told that they had died.

Bacs’ figures also show that current account switching generally is up year-on-year.

It said that switching levels between October 1 2017 and September 30 2018 were up by 5% on the previous 12 months.

Some 941,122 switches were completed between October 1 2017 and September 30 2018.

Bacs said more than 5.1 million successful switches have taken place since Cass launched in 2013.

Here are the net switching gains/losses made by banks and building societies between April 1 and June 30 from customers using Cass:

– AIB Group (UK) plc (includes First Trust Bank and Allied Irish Bank GB brand switches), minus 818
– Bank of Ireland (includes Post Office brand switches), minus 529
– Bank of Scotland, 1,294
– Barclays, minus 4,420
– Clydesdale Bank (includes Yorkshire Bank brand switches), minus 7,064
– Co-operative (includes Smile brand switches), minus 9,261
– Danske, 4
– Halifax, 784
– HSBC (includes First Direct and Marks & Spencer Bank brand switches), 25,605
– Lloyds Bank, minus 5,540
– Monzo Bank, 2,702
– Nationwide, 34,577
– NatWest, minus 12,053
– RBS (includes Adam & Company, Coutts and Isle of Man brand switches), minus 12,362
– Santander, minus 377
– Starling Bank, 1,737
– Tesco Bank, 567
– TSB, minus 16,641
– Ulster Bank, minus 769

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