It is a truth universally acknowledged that people are more likely to divorce than switch bank accounts, and the big four still control more than 85 per cent of the market. Since TSB launched as a challenger bank three years ago, it has called for greater competition in the sector.
When the Competition and Markets Authority (CMA) opened its investigation into retail banking competition, it provided an opportunity for TSB to call for change and suggest credible solutions. It started by commissioning an in-depth report into banking practices, Competition Matters, that was published a week before the CMA produced its provisional findings in November 2015.
This found that 83 per cent of consumers believe banks need to change the way they operate, and highlighted issues that particularly concerned them, such as a lack of transparency about the charges for banking services and the difficulties in comparing and contrasting various bank accounts. While the Current Account Switch Service was launched three years ago, just two per cent of customers used it to switch banks in 2014.
TSB put forward four suggestions to improve competition in the banking sector, such as requiring banks to inform customers how much their services cost each month. It also suggested a Credit Passport, which would provide historic transaction data for overdraft users seeking to raise a loan or swap banks.
The bank also created a blog on its Truth & Banking consumer news site, that called for the banking sector to be opened up to competition. TSB also embarked on a series of one-to-one meetings with civil servants, select committee members, parliamentarians and consumer groups as it sought to establish itself as the ‘go to’ voice on the subject of banking competition.
It also hosted panel events during the political party conferences to discuss the consumer benefits of competition. A social media campaign, using key messages, quotes and infographics that would resonate with customers, supported the public affairs and media relations initiative, which was spearheaded by chief executive Paul Pester.
From the outset, TSB defined the success of this campaign as ensuring it became the ‘go to voice’ on increasing competition, the adoption of some of its recommendations by the CMA and increasing its share of new bank account openings. TSB dominated media coverage from November 2015, when the CMA published its provisional findings and remedies, and its final report in May, achieving 97 per cent ‘positive or balanced’ sentiment.
Pester was the most quoted bank chief executive on the day the report was published, and the concept of a monthly bill has been passed to the regulator for testing. Remedies that achieved the objective of TSB’s Credit Passport also appeared in CMA’s provisional findings. And TSB’s share of new account openings was up seven per cent in the first half of 2016, against a target of six per cent.