The major UK banks are in denial. In my conversations with bank executives over the past few years I have suggested they should be more concerned and less complacent. Customer sentiment, greater consumer choice and regulators who are taking an increasingly tough line are all tipping in the wrong direction for them. And yet they don’t seem to be losing any sleep.

Flick through the annual reports of the major UK banks and it is clear that they are all trying to compete on customer experience but none of them is managing to stand out from the pack. They are all taking initiatives and launching programmes to improve the customer experience but the view of people I talk to is that there is not much to separate one major bank from the next.

First Direct, owned by HSBC, has been the exception for 25 years but they purposely set out to create a different type of bank. The failure to differentiate has consequences. Customer loyalty has declined and most customers spread their purchase of financial products across a number of providers in a way they did not 20 years ago.

Customers are also turning to the FinTechs such as Revolut, Monzo and Starling Bank. These new banks have gained millions of new customers, many opening second accounts with their main account being with one of the traditional banks. And still bank executives do not appear to be stressed. They should be.

Against this backdrop, below are two polarising examples of how Barclays and TSB have responded differently to protect customers from online banking fraud. And in the case of Barclays – how it has also failed to protect struggling borrowers.

1. Barclays was fined £26m in December last year for poor treatment of more than 1.5 million struggling borrowers. The Financial Conduct Authority (FCA) issued its largest fine ever when it found that Barclays had mistreated business and personal customers who were in financial difficulties and fell behind on credit card and loan payments between 2014 and 2018. The failure to have appropriate conversations with customers in a timely manner meant that customers agreed to unaffordable or unsustainable payment plans that made matters worse, not better. The FCA issued a warning that all banks need to do better when dealing with customers facing financial difficulties due to the current Covid crisis. The very same day that their fine was made public and the FCA issued its warning, Barclays was reportedly meeting with representatives of other leading UK banks to discuss how they could limit their exposure to customers who had been subjected to online banking fraud.

2. When Debbie Crosbie, Chief Executive of TSB Bank, was then asked in a radio interview at the time why she had not attended the meeting with Barclays and the other banks, Debbie Crosbie replied that her bank already provides a 100% fraud refund guarantee for any loss incurred and had no reason to attend the meeting.

TSB’s guarantee really sets the bank apart from its bigger rivals. The guarantee applies even if the customer made a mistake or if they have accidentally shared some sensitive information. It is dramatically different from the approach the big four UK banks adopt when dealing with a customer who has experienced online banking fraud.

So to those executives who are complacent or unsure how to differentiate they could take a leaf out of TSB’s book. They should inject some fresh thinking into their CX programmes and focus on the things that customers really care about. And right now safety and security are top of mind for customers as they seek to navigate a difficult and uncertain financial landscape.


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