Once described as being a ‘real challenger’, it seems that TSB has now become a real challenge itself after reporting a significant £204m loss in the latest results announcements for 2020. The company citing the impact of COVID-19 as the biggest contributing factor makes sense, but the bank has struggled since coming off the Lloyds IT platform, says GlobalData, a leading data and analytics company.
Jaimini Pattani, Banking Analyst at GlobalData, comments: “While TSB’s new CEO has made various IT changes and restructuring plans, it is too little too late for the bank, and the selling of TSB by owner Sabadell may be on the horizon. In the current competitive environment, TSB’s standardized digital offerings and poor digital UX suggests that it will be difficult for the bank to successfully compete with its peers.”
In an earlier release by GlobalData, Cyrus Mewawalla, Head of Thematic Research at GlobalData, highlighted the importance of digital transformation during and post-COVID-19, saying: “Targeted, tactical digital transformation will be vital for companies to survive in the new world. The way we work, shop, eat, seek medical advice, socialize, and entertain ourselves has fundamentally changed, and there is no going back. No-one could possibly have predicted the seismic shock COVID-19 has caused to the world. However, what we do know is the world relies on technology, and it will be the beating heart of its recovery.”
The importance of the digital transformation theme is no stranger to the banking sector. According to CASS switching figures from wearepay.uk, the top three reasons people rate their new bank account as better than their old account remain service related. TSB’s losses in the number of current account switches (seen in at least seven consecutive periods in a row between 2019 and 2020) are likely due to poor digital services.
Pattani continues: “TSB’s high number of reported branch closures is concerning as it will be difficult for the bank to acquire new customers through existing digital offerings, questionable marketing, and lack of social media presence.
“Worryingly, the TSB brand is best known for its IT migration blunder – a result of migrating away from the Lloyds platform to new parent Sabadell. TSB has since had to move at pace to keep up with other players and, at times, this has come at the cost of platform reliability.
“Additionally, the bank is continuously in the spotlight for its digital channels being unavailable for long periods of time. When TSB was part of Lloyds, it had a common tech platform, but since the blunder it has struggled to shift its image as the bank that botched system migrations in 2018, which resulted in thousands of customers being locked out of their accounts for days.”