Why the UK excels at mismanaging expectations


More than 90,000 customers have complained and 1,300 have lost money to fraudsters, including one couple who watched their wedding savings being siphoned from their bank account as they waited on the phone to TSB’s anti-fraud department.

The UK bank is writing a new chapter in the horrible history of IT disasters, after bungling the transfer of customer data from its previous owner, Lloyds, to a platform built by Sabadell of Spain, which bought TSB in 2015.

The bank further compounded the pain by at first issuing what the UK financial regulator described as “generalised and rosy” statements about its progress in fixing the problems. Hauled back before members of parliament last week, Paul Pester, TSB chief executive, apologised repeatedly for “the terrible time” inflicted on customers.

It is not unusual for organisations to fumble technology transition, particularly banks. They were among the first to computerise and they often sit on a tangle of fragile legacy systems. Successive bouts of consolidation and demerger have merely multiplied the ways in which things can go wrong.

TSB was once in the vanguard of computerisation. In 1955, the proud association of mutuals called the Trustee Savings Banks, of which TSB is a pallid and interbred descendant, set up an Ad Hoc Committee to Investigate Mechanisation. Committee members worried the change to computers and adding machines could threaten the banks’ “long tradition of courteous personal services”.

Sixty years on, that warning has come true in a most catastrophic way. A report being prepared by one of the many professional services firms that buzz around such meltdowns like bluebottles may reveal how much can be blamed on Mr Pester and his team. MPs have leapt to judgment, casting doubt on his future as chief executive.

TSB is already guilty of mismanaging expectations. This may come as a surprise because businesses are expert in the art of grooming the assumptions of, say, analysts and investors. But raising and dashing hopes is becoming something of a British national trait.

The UK’s rail companies have just fouled up an overhaul of their timetables. Even an infant knows this is a core competence for a railway. Govia Thameslink, which happens to run the trains on which I commute, has tried to cover for three weeks of chaos, cancellation and delay by stating that it has implemented “short-term timetable amendments”, stretching the definition of all three words. This widespread failure to plan, implement and then manage change also bodes extremely badly for Brexit, possibly the biggest, most complicated national transition ever attempted.

From the moment it split from Lloyds, TSB, like the Brexiters, used nostalgia and clever advertising to depict itself as a refreshing, independent force, liberated to challenge the discredited incumbents of a misconceived marketplace.

A promotional 2013 cartoon of TSB’s “story” disinterred Henry Duncan, the 19th century Scottish cleric who founded the first savings bank, and press-ganged him to the bank’s cause. It is a classic of the genre of rose-tinted bank advertising that makes me scream. A former colleague says, unfairly, this is because I have reached the “shouting at ads” years, but I defy anybody of any age not to heckle the ad campaigns of TSB’s former parent Lloyds, which play on its black horse logo in an attempt to bury its recent scandal-hit history in equine schmaltz.

TSB is a byproduct of the financial crisis: the rescue by Lloyds of failing HBOS, the subsequent government bailout, the EU’s insistence Lloyds sell some branches, and the bank’s unsuccessful attempt to offload those branches, under the TSB brand, to the sickly Co-operative Bank.

TSB’s fall is all the greater because it set itself on a pedestal as the kind of bank “the people of Britain want . . . with none of the funny stuff people normally associate with traditional banks”. Alas, repeated appearances before parliamentary committees are exactly the stuff scandal-weary UK customers have come to associate with banks. I feel for those TSB customers drawn in by overblown promises, but also for branch staff. Some were driven to tears by their inability to handle customers’ demands, despite their desire to do so.

To be fair to TSB, it did alert customers in advance that they might be inconvenienced by its systems “upgrade” and it has started to abandon its Brexity reliance on bold assertion as a means of convincing everyone that a project is on course. The bank has also, temporarily, stripped its internet homepage of annoying cartoons trumpeting its alleged virtues. Instead, the simplified site offers help, support, a warning about fraud, a place to complain, and a contact number. I rather like it.

andrew.hill@ft.com

Twitter: @andrewtghill



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