Tesco Bank to make its big banking push on its own
June 27, 2011‐ UK
Media reports say that the Head of Tesco's retail services business, Andrew Higginson, told a news major at a summit that Tesco Bank is planning to expand its banking operations later during the autumn. And unlike as expected, it is doing so on its own instead of depending on Lloyds or the Northern Rock.
Tesco appeared in the banking business arena in 2008 when it bought out a financial services joint venture of Royal Bank of Scotland. Though the arm did release some products and services, they really didn’t gather large audience. Tesco, the #3 retail operator in the world, says it is focusing on strengthening its capabilities in the banking and financial space since then by improving its IT platform and call centres apart from bringing in some good managers to take care of the operations. The JV, during this time, increased its head count from 185 people to over 3000.
Earlier during this month, Tesco was in negative news after customers complained that their accounts got locked in and could not do their online transactions. Its Chief executive Benny Higgins apologised "unreservedly" for the glitch admitting that 2500-odd customers experienced the trouble. The trouble began when the customer savings accounts data of about 605,000 accounts was migrated from the old RBS system to their own new systems. Two technical failures on Monday and Tuesday had led to chaos as customers began to call the bank or email them apart from reaching media websites posting complaints against the bank. Some customers say that though a week has passed, few customers are still not able to login. The bank phone lines were choked forcing customers to be put on hold for long durations. The bank said that it will even compensate customers on a case-by-case basis and if the customer can prove they had lost out financially as a result of the fault. Problems such as these are something new to Tesco and the giant is working on getting rid of these.
Other plans for the banking arm include the migration of the 2.5 million-odd credit cards holders to a new platform during August and September. All these upgradations would allow it to launch mortgages in early autumn and tax-efficient individual savings accounts February 2012 and current accounts by autumn 2012. Tesco is arming its marketing team to get ready for the big launches.
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