WHAT IS GOING ON AT TSB?
It’s meant to be the bank that’s on your side, but it’s losing customers and being taken over by a giant Spanish rival . . .
THE voice of the only customer standing in the TSB branch at Church Street in Enfield, North London, rings out through the dingy room.
The carpet has a tired, insipid blue pattern, the walls are grey, and giant red lampshades — matching nothing else in the room — hang over two empty desks. It’s lucky the customer isn’t discussing anything sensitive because you can hear every word from the far end of the room. When she leaves, it is utterly silent. Two cashiers carry on their work behind glass screens.
For five minutes no one comes in. I leave the branch and turn left and walk past the post office and a few mobile phone shops. I cross the road and there is another bank. When you walk through the doors, staff in pale blue shirts ask: ‘What are you here to do today?’
Behind them are cashier’s desks with staff sitting on wooden stools at a high pine counter. The floors and walls are white, and there are desks with iPads and computers. On the left is a 5 ft wide touch screen for customers to use.
This is also a branch of TSB — just 180 paces from the other one. It doesn’t just look like a different bank, it feels like another era, or perhaps a mobile phone or Apple store.
This branch is the future of TSB; the one down the street is its past.
Today, Money Mail can reveal that TSB plans to shut the older branch and 16 others like it.
As part of its latest results, the bank — which was formed in 2012 by a European ruling that forced giant Lloyds Banking Group to sell off some of its branches — will report to the stock exchange today a new plan to become one of the big players on the High Street.
Part of that means axing unwanted branches, but also a radical overhaul of the way it sells products, which will attempt to put customers first.
All sales data will be banned from branches. No staff member, branch manager or regional boss will get to see what is being sold. And there are no sales targets or commission for local staff. The idea is that if staff don’t feel under pressure to meet targets then they will concentrate more on giving customers what they want.
It’s a bold plan, but TSB’s ambitions may come as a shock to some.
It is Britain’s forgotten bank — not part of the Big Five club of Barclays, RBS, Lloyds, HSBC and Santander, and not an alternative, such as Nationwide Building Society or the Co-op.
And it comes as investors and customers will get an update on a proposed take- over bid by Spanish bank Sabadell.
BATTLE TO TAKE ON THE BIG NAMES
SHuTTING branches is a painful decision for any bank. Last year, 470 closed across the country, including big names such as Barclays and NatWest.
Each closure led to criticism that communities were being abandoned, kick-starting a decline of all the stores in a town.
But for TSB, which is Britain’s largest so-called challenger bank, it is even more sensitive because this is a bank that is seeking to wash away the tarnished reputation of Britain’s banking sector.
It is trying to put customers first and sales second, has a strong balance sheet and a focus on local communities.
But it is also having to play catchup. It was one of the last to introduce a mobile phone app (in February), and its customers realise other banks are ahead in their modernisation. Karan Raju, 45, who owns a shop in Enfield, looks round the new high-tech TSB branch and says: ‘I quite like the new look, but for me TSB is just starting to catch up with what my other bank — NatWest — has done.’
That’s certainly true. TSB staff have been given training to help customers use online services, which NatWest and Barclays already do. There are iPads, fewer counters and staff welcoming you at the door: all are already common at the big names.
IS HISTORY SET TO REPEAT ITSELF?
TSB was established as Trustee Savings Bank in 1810 by the Reverend Henry Duncan, with the aim to serve the local people, particularly the poor.
But in 1995 its branches disappeared from the High Street after being merged with Lloyds Bank.
When Lloyds — which became Lloyds Banking Group after guzzling up Halifax and Bank of Scotland — was ordered to get rid of 631 branches following the financial crisis, TSB reappeared again.
Its name came back on the High Street in 2012, and then floated on the stock exchange last year. All its customers were given shares.
For many customers, who remember when the bank was first taken over, history may be about to repeat itself.
Last month, Spanish bank Sabadell announced its intention to buy TSB and shareholders are voting on whether this latest merger should go ahead.
It’s a roller-coaster history — and all while TSB is trying to build itself a reputation as being a local bank, representing the communities its branches are in.
‘I don’t want our customers calling call centres if they have a question — I want them to call me here and know me,’ says TSB Enfield branch manager Francesca Bell.
‘If you’ve left something behind at a branch or need to ask a question, then you should be able to get through to someone here.’
It’s a boast TSB is proud of: local
phone numbers, so you don’t have to speak to a strange call centre.
And there are local opening times to fit the community — Enfield is open until 7pm on a Thursday because the town centre has late-night shopping.
The modern branch in Enfield — which cost £700,000 to refurbish — has helpful little details carefully planted everywhere.
There’s a blackboard listing events such as farmers’ markets and to the left is a row of umbrellas that customers are free to take (though they are supposed to bring them back).
On the touch screen there is a button you can press to bring up property website Zoopla and browse houses for sale in the area.
On the wall is a caricature of the poet John Keats, who went to school in Enfield. All the bank meeting areas are named after his poems — one is called Sunshine, another is called Hyperion. These little ‘ hubs’ are for appointments and look like the living area in a caravan — with a small round table and comfy seating running in a L-shape around it.
‘It’s designed like this because we don’t want a barrier between us and a customer,’ says Francesca. ‘ We want to be able to sit next to them.’
These all seem like good messages that TSB is sending its 4.6 million customers. But latest figures show that while it gained 14,443 new current account customers from July to September last year, some 18,593 accounts were also closed — a loss of 4,150 overall.
By contrast, rivals such as Nationwide BS gained 6,608 new customers overall, Santander picked up 43,312 and Halifax 53,624.
So, why aren’t more people staying with TSB? Simply, customers are choosing to move to banks that advertise big perks — Santander pays up to 3 pc cashback and Halifax £5 a month.
While TSB pays 5 pc up to £2,000 on its current account, good service, it seems, may not be such a crucial issue for bank switchers.
So, the branch closures come at a problematic time. It does at least have a good reason for doing it. They are all less than 500 metres from another TSB bank. In Peterborough and Carmarthen, there are branches just 40 metres apart.
Meanwhile, hundreds of other branches are being given a facelift and some will get a digital overhaul, like the one in Enfield.
Francesca, 27, has been branch manager there since February, having previously run the branch in nearby Cockfosters.
She’s aware of how the radical overhaul might shock some of her older customers.
‘When they come in we take them by the hand and give them the tour, showing them everything.
‘And if they still want to have a private conversation in a private room, then we have that, too. The key is not to expect people to walk in and immediately understand how everything works. It’s a big change and it’s our job to help them.’
As part of its restructuring, TSB is investing £250 million in new branches and technology. It’s what the marketing wonks call ‘bricks and clicks’.
Another mantra is that branches are ‘neighbourly with know-how’.
‘This is about making the business of banking a bit more personal,’ says TSB’s chief digital officer Ashley Machin. ‘Small things that set a tone in the community.’
Won’t all this get lost if the bank gets taken over by Sabadell? The Spanish giant has pledged to keep the ethics of TSB and invest in small businesses.
And it seems to be the last thing on the mind of customers in the branch on the day I visited, even though all of them should get a vote on the matter.
But the Mail’s City editor Alex Brummer recently wrote: ‘The manner in which TSB’s bosses rolled over at the first sound of gunfire and sweet talk about Sabadell being a lover of small business is pathetic.’
TSB’s head of branches, Peter Navin, says: ‘The key thing for us remains looking after customers and keeping focused on the things that are really, really important to them.’
SHORTER QUEUES AND A CUPPA
EVEN though the bank is being sold, investment has not stopped. Millions have been spent on retraining staff to hammer home the message that happy customers, rather than sales, are important.
During my visit, it’s hard to pin down Francesca. She keeps running off to speak to customers. Some need help or advice, others seem to have just come in for a chat. Almost everyone gets offered a cup of tea
Maureen Smith, who is in her 70s, has come to deposit some cash.
‘I got quite a shock when I came in here after it had been done up,’ she says.
‘I do rather like it, but there are no grills or anything they can pull down if there was an emergency and that does worry me a bit.’
And there’s an overwhelming feeling from everyone you speak to that while the redesigned branch is brighter, bigger and means shorter queues, customers just aren’t that fussed. The gadgets are fun, but they just want to get on with their banking as quickly as possible.
In fact, in the two hours I’m in the branch, only I use the iPad and the touch-screen TV.
The bank may have a long way to go to convince its customers that it’s ready to take on the big names on the High Street.