Lloyds Banking Group is officially spinning out its new standalone TSB bank branch today, but the website has suffered an outage on its first morning, in common with all of Lloyds BG’s online retail banking platforms. According to the bank, there have been "intermittent" website problems across its brands this morning.
The launch of the standalone TSB brand was necessary after the failure of the Co-op Bank project verde takeover after that institution nearly collapsed earlier this year. The rollout of the 632 standalone TSB bank branches and their associated 5m customers to the revived TSB brand was installed as the new divestment plan to mollify the EU, which is demanding the sell-off as the ‘quid pro quo’ for the UK government saving the banking group at the height of the crash in 2008 and as a means to reintroduce more competition on the high street. RBS' similar project rainbow divestment of UK retail bank branches to create a 'newcomer' competitor, in this case Williams & Glyn, is also facing up to the same tech problems of splitting apart operations that previously shared the same technology and service platforms.
Customer sort codes and bank account numbers at the reborn TSB will remain the same during the migration of 5m UK retail customers from Lloyds Bank ownership over to the TSB banking brand. The scale of the migration has long presented technology challenges and de-merging data is no easy task but the bank will be disappointed at the online banking access failures this morning, as no such large-scale activities have yet been undertaken. The sell-off and complete de-merging of the new standalone unit is not expected unitl next year.
The IT problem for now seems to have been resolved, although some customers are understood to be still experiencing occasional difficulties and social media complaints have been rising, even if some of them are belated.
Reaction to online banking outage at Lloyds / TSB
Reacting to the news of this morning’s outage, Michael Allen, director of application performance management (APM) at Compuware, said: “Given the uncertainty that the split has caused for customers, for them to not be able to get into their accounts this morning will have created unnecessary stress for thousands, if not millions, of customers.
“Banks need to manage the risks associated with technology performance in a more proactive way, with early warning systems that can alert them to potential problems before they create chaos for their customers,” he continued. “ For example, monitoring these services from an end-user’s perspective to see how they perform in the real world will identify any weak spots and inefficiencies and enable them to be rectified ahead of demand hitting, rather than after the complaints have begun to pour in.”
Speaking before news of the outage spread, Mike Davies, a European vice president at GMC, had been looking forward to the rebirth of a bank that once stood for customer innovation, highlighting that it was “the first [UK] bank to introduce telephone banking back in the day”.
With the UK’s shared current account switching service due to launch on 16 September imminent any new challenger bank on the High Street should be able to attract customers quickly if its customer service and operations are good enough. The seven day account switching service relies on a shared back-end system common to all UK banks and building societies and means that customer direct debits, standing orders and all other bank account details should automatically be redirected to their new bank account without any action from them being required. It is supposed to be as simple as redirecting your postal mail and is one of a number of measures designed to introduce more competition back into the UK retail banking market, which is dominated by the big four of Barclays, RBS/NatWest, HSBC, and Lloyds Banking Group.
By Neil Ainger