TSB has renewed its calls for the Competition and Markets Authority (CMA) to take action to make it easier for challenger banks to take on the established players.
Paul Pester, chief executive of TSB, said the competition authority had a “once in a generation opportunity” to change the market and break the stranglehold of the big four – HSBC, Barclays, Lloyds Banking Group and Royal Bank of Scotland – over current accounts.
“We want all bank customers to know what they’re paying for their banking; all customers – including overdraft users – to be able to switch easily; and all customers to be aware of their right to switch banks. Only then will competition really start to work and the culture of UK banks finally shift to serving customers on their terms – rather than on the banks’,” said Pester.
Better information about the cost of current accounts, particularly for those with overdrafts, could lead to 10 times more customers switching, he said. Between 2% and 4% of customers switch their current account provider.
As it announced its first quarter results, TSB said it was beating its target to attract 6% of all customers switching or opening a current account, winning 7.1% of customers during the first three months of the year.
TSB was spun out of Lloyds Banking Group to meet demands imposed by the EU during the 2008 taxpayer bailouts and was floated on the stock market in June 2014 and taken over by Sabadell of Spain in March 2015.
The bank, which has around 600 branches, has attracted some controversy for a system of profiling customers, putting them in four categories: logical thinker, amiable, controller or emotional expressive.
Pester said he would fall into the logical thinker category and insisted that the process was not intended to generate sales. “It’s not about selling stuff … Our whole model is to have great products and great service.”
The CMA has delayed its report into the banking industry to give it time to come up with ways of improving service to customers who have overdrafts. The final report was originally scheduled for May but there was criticism of its proposals to increase competition when the provisional findings were published in October. The final outcome is now expected in August – two years after it was launched.
