On the 20th April, TSB’s planned system migration, of over a billion customer records, spectacularly failed, with the following disruption one of the worst since Northern Rock at the start of the banking crisis. Almost eight weeks later, consequences continue to mount for the commercial and retail bank.
Since the IT meltdown, it has been reported that TSB has handled approaching 100,000 complaints, 1,300 customers have suffered financial loss and there have been over 2,000 attempts of cyber-fraud. BBC’s MoneyBox Podcast have been following this fiasco closely, broadcasting phone -ins from customers who have logged onto their account, seen fraudulent activity, called the fraud line and been forced to be on hold for up to 7 hours while bit by bit their life savings are being drained from their accounts. It is clear, that customers and MPs have had enough. In this short time, 12,500 customers have left, with many more expected to leave once they have access to their savings. Last week, MPs revealed they have lost confidence in CEO Peter Pester to resolve on-going consequences.
What does this mean for the financial sector? If one of the ‘big five’ banks can suffer prolonged IT and customer service issues, then it is possible that the halo effect around the big banks could fade. With new start-ups springing up all the time, offering intuitive and convenient banking, why wouldn’t consumers and businesses start to consider other options? App-only banks are on the rise, being promoted by companies such as Money Saving Expert, and open-banking will force customers to confront today’s big decision head-on: what is bigger – the risk of fraud or the benefits of financial convenience?
The sector, and your customers are modernising. Are you keeping up with the latest trends and market forces? Are you prepared to differentiate your offering to compete in an open banking era? Do you want to stand out as a customer champion in this saturated market?
Here at Impact we work with organisations in the financial services sector to understand changing market dynamics and stay ahead of the latest trends. Directly connecting businesses with their customers, using advanced analytics methods to test and stretch willingness to pay, and understanding what future customers want from their banking and financial products.
For more information about how we are helping organisations reduce risk, stay agile and delight customers, email me directly on firstname.lastname@example.org or call: +44 (0) 1932 226793.