Simon Read: After its successful flotation, the struggle to gain customers' trust begins for TSB

 

Paul Pester seemed pretty pleased with himself yesterday. After shares in TSB were 10 times oversubscribed, the bank's boss said: "It shows there is real appetite for a different kind of bank – a high street bank, not a Wall Street bank – which is focused on customer service.

"We are now focused on delivering on our strategy of bringing more competition to high street banking across Britain."

We certainly do need more competition. But will TSB – which has 4.5 million customers – deliver it? I've been critical of the bank's claims in the past but maybe it's time to give it a chance to prove itself now that it has finally split from Lloyds Banking Group.

What has the bank promised to do that is different? In its prospectus it said: "We were created to bring more competition to the UK banking market – to be a real challenger to the big banks and to deliver better banking for all British consumers."

That's all good. We all desire better banking. TSB went on to say it "purely serves local customers and local businesses, in order to fuel local economies, and so help create thriving local communities all across Britain and nowhere else."

That sounds a little parochial, doesn't it? It does to me. And does it actually promise much-needed help for local communities? Not really. Frankly, until I see evidence of a bank actually doing good in communities, I simply won't believe it.

Smaller banks, such as the ethical Triodos, publish details of where all your money is used and it operates on strict principles. It says: "We only lend our savers' money to people and organisations who are working to make a positive impact – culturally, socially and environmentally."

What does TSB say? "We use every penny TSB customers deposit with us to fund mortgages and loans for other TSB customers. And nothing else."

That sounds a bit of an empty promise, too. To become a TSB customer, you simply need to apply for a loan, so the TSB's promise could actually be read to say: "We use your money to lend to anyone."

But, as I said at the start of this column, let's give TSB a chance now. As much as I admire Triodos, it's never going to be a mainstream bank. TSB does have that chance and I would love to see it really take on the other high street banks.

To be a success it needs to focus on customer service, as Mr Pester promised yesterday. Gimmicks such as paying 5 per cent interest on credit balances on current accounts are not the way to engender long-term loyalty. The bank will only do that by delivering on Mr Pester's promise.

FirstDirect – a genuine force for Positive Change

One major bank consistently wins accolades for its service. It's the online bank FirstDirect, owned by HSBC. This week it was named Best Banking Brand in the Which? Awards.

The consumer organisation said: "FirstDirect has top customer scores for current accounts, savings and mortgages, and takes fourth place for credit cards.

"Feedback about its customer service is unmatched by any other banking brand. It's the only bank to achieve five stars for customer service when dealing with queries for both current and savings accounts.

"And our previous investigations into savings and financial complaints have shown that very few of its customers have cause to complain."

I remember when FirstDirect was launched 25 years ago as a telephone-only bank. Some scoffed then that it wouldn't survive without branches. But it has not only survived, but thrived.

That's the challenge for other new banks, such as TSB. FirstDirect's success is down to one key factor. It's not that it pays the best rates or has the lowest charges. It doesn't. The not-so-secret key to its success is good customer service. It does things efficiently and puts them right quickly when things go wrong.

Customers like that. Sure there are some that are happy to chase market-leading deals and switch regularly to save a few pennies or get a bit more interest on the savings. But there's a silent majority, I believe, that simply wants a bank it can rely on.

The challenge for high street banks in the future should not be to launch market-leading rates, but to provide decent deals backed up with first-class service.

Which? also presented Martin Wheatley, chief executive of the Financial Conduct Authority, with its Positive Change award for "starting to shift the culture of financial regulation and for making a clear commitment to put the interests of consumers first."

It praised the FCA for showing "a willingness to understand the behaviour of real consumers."

I don't want to carp, but it's about time it did try to understand them! Like the banks, the City regulator must keep consumers at the heart of its business.

s.read@independent.co.uk

Twitter: @simonnread

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Life and Style
life
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
News
Joan Rivers has reportedly been hospitalised after she stopped breathing during surgery
people81-year-old 'stopped breathing' during vocal chord surgery
Life and Style
Chen Mao recovers in BK Hospital, Seoul
health
PROMOTED VIDEO
Life and Style
One in six drivers cannot identify a single one of the main components found under the bonnet of an average car
motoringOne in six drivers can't carry out basic under-bonnet checks
Environment
environmentCrop pests are 'grave threat to global food security'
News
i100
Voices
Pupils educated at schools like Eton (pictured) are far more likely to succeed in politics and the judiciary, the report found
voices
Arts and Entertainment
Simon Cowell is less than impressed with the Strictly/X Factor scheduling clash
tvSimon Cowell blasts BBC for breaking 'gentlemen's agreement' in scheduling war
Arts and Entertainment
Shady character: Jon Hamm as sports agent JB Bernstein in Million Dollar Arm
filmReview: Jon Hamm finally finds the right role on the big screen in Million Dollar Arm
News
Orson Welles made Citizen Kane at 25, and battled with Hollywood film studios thereafter
people
News
Brad Pitt and Angelina Jolie reportedly married in secret on Saturday
peopleSpokesperson for couple confirms they tied the knot on Saturday after almost a decade together
Sport
footballAnd Liverpool are happy despite drawing European champions
News
i100
Arts and Entertainment
tv
News
i100
Arts and Entertainment
Diana from the Great British Bake Off 2014
tvProducers confirm contestant left because of illness
Arts and Entertainment
Lisa Kudrow, Courtney Cox and Jennifer Anniston reunite for a mini Friends sketch on Jimmy Kimmel Live
tv
Life and Style
fashion

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Head of Marketing (Online & Offline, Media, Digital, Strategy)

    £85000 - £100000 per annum: Ashdown Group: Head of Marketing - Slough, Berkshi...

    Database Developer (SSIS, TSQL, Microsoft SQL) London Finance

    £35000 - £55000 per annum: Harrington Starr: A Global global asset management ...

    Web Developer/UI Developer (HTML5, CSS3,Jquery) London

    £55000 - £65000 per annum: Harrington Starr: A Global Financial Service Organi...

    JavaScript Developer (C++ / C# / HTML, Java Angular.js) London

    £50000 - £60000 per annum: Harrington Starr: A world leading business intellig...

    Day In a Page

    Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

    The phoney war is over

    Russian troops and armour pour into Ukraine
    Potatoes could be off the menu as crop pests threaten UK

    Potatoes could be off the menu as crop pests threaten UK

    The world’s entire food system is under attack - and Britain is most at risk, according to a new study
    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

    Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
    From Mozart to Orson Welles: Creative geniuses who peaked too soon

    Creative geniuses who peaked too soon

    After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
    Caught in the crossfire of a cyber Cold War

    Caught in the crossfire of a cyber Cold War

    Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

    Salomé: A head for seduction

    Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
    From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

    British Library celebrates all things Gothic

    Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
    The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

    Is the Hard Rock Café worth fighting for?

    The restaurant chain's owners are currently embroiled in a bitter legal dispute
    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

    In search of Caribbean soul food

    Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
    11 best face powders

    11 best face powders

    Sweep away shiny skin with our pick of the best pressed and loose powder bases
    England vs Norway: Roy Hodgson's hands tied by exploding top flight

    Roy Hodgson's hands tied by exploding top flight

    Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
    Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

    Di Maria and Ronaldo: A tale of two Manchester United No 7s

    They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
    Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

    Robert Fisk: No victory for Israel despite weeks of devastation

    Palestinians have won: they are still in Gaza, and Hamas is still there
    Mary Beard writes character reference for Twitter troll who called her a 'slut'

    Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

    The Cambridge University classicist even wrote the student a character reference
    America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

    America’s new apartheid

    Prosperous white districts are choosing to break away from black cities and go it alone