TSB sheds 20,000 current accounts in wake of massive IT failure

Between April and June, 21,790 switched away from the bank while just 5,149 joined

Ben Chapman
Wednesday 24 October 2018 17:13
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Up to 1.9 million customers were locked out of their accounts due to technical problems at TSB
Up to 1.9 million customers were locked out of their accounts due to technical problems at TSB

More than 20,000 customers left TSB in the wake of an IT meltdown, figures show.

Among customers using the seven-day current account switching service (Cass) between April and June, 21,790 switched away from the bank while just 5,149 joined.

TSB said the figures give an incomplete picture because many people switch providers without using the Cass system.

The beleaguered lender claimed it welcomed more than 20,000 new customers during the latest quarter.

The figures have been released after former TSB boss Paul Pester finally stepped down last month following sustained pressure over his handling of technical problems at TSB.

Up to 1.9 million customers were locked out of their accounts in April while some reported that they could see other people’s details and could not make payments.

The latest bank switching figures show that Nationwide benefited from the biggest gain of any UK lender, with a net 34,577 customers joining between April and June. HSBC also fared well with a net gain of 25,605.

The switching service allows customers to change their current account to any provider who has joined the scheme. All payments should be rerouted to the new account within seven days making it easier for consumers to change banks if they are not happy or they see a better deal elsewhere.

App-only challenger banks also added new customers through Cass, with Starling making a net gain of 1,737 and Monzo notching up 2,702 switches.

The newcomers are aiming to shake up an industry well known for dire customer service and a series of mis-selling scandals.

Established high street names such as Lloyds Bank, Santander RBS and NatWest all made net switching losses.

TSB was itself hailed as a challenger bank that could jolt the big names into improving but the IT fiasco has severely damaged its reputation.

MPs on the Treasury Select Committee heavily criticised the bank’s then chief executive in bruising exchanges earlier this year.

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Responding to news he would step down last month, committee chair Nicky Morgan said: “Since the IT problems at TSB began, Paul Pester set the tone for TSB's complacent and misleading public communications.

”The Treasury Committee, therefore, concluded that it lost confidence in Dr Pester's position as chief executive of TSB.

“In this light, it is right that he is stepping down.”

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