> The systems failure in April, affecting nearly two million TSB customers, was a breaking point for Mr. Stevenson. He moved his money to Monzo, a British start-up that is among a growing number in Europe offering checking accounts and A.T.M. cards, but lack physical branches — everything is done through an app.
I don't quite understand this logic. Sure there was a very inconvenient failure. But the reaction is the move your money away from established banks with thousands of employees to an app-based startup? No, not for me, thank you.
The key thing with TSB was that none of their thousands of employees could fix the problems for weeks in end, so it appears many customers have come to the realisation that they should not be with a bank that cannot rectify issues, and thus they are looking elsewhere.
You seem to be trying to signal that you're conservative. Thus in this scenario, you would leave TSB and go to another established bank with thousands of employees - and maybe, despite their legacy systems, you'd be fine.
The original person in the example though has reached the point where they're leaving and they're willing to try something new. They won't actually be at greater risk of loss, since there's a well established ombudsman and UK banks have a guarantee (FSCS), so then it becomes a matter of inconvenience from any bank mistakes (until they're rectified) and the level of features - with modern systems, it's entirely likely the startup app-only bank will do better on both these points. So it's not the sort of gamble you seem to think it is after all...
I'd love to see what TSB's tech stack looks like now. I've worked on data migration projects with financial institutions in the past and the mountains of technical debt are truly terrifying. If TSB have gone through all of this pain and emerged at the other end as a truly modern bank without all the historical cruft I'd be seriously tempted to move over to them.
Don't get me wrong - I'm firmly in the "don't fix it if it ain't broke" camp and have no problem at all with 40-year-old COBOL code handling my transactions. But in my experience plenty of this code is broke and the amount of manual intervention to make things work would have a lot of people keeping their money under their mattress if they saw it first hand.
If TSB have gone through all of this pain and emerged at the other end as a truly modern bank without all the historical cruft I'd be seriously tempted to move over to them
They haven't eliminated it, they just moved from Lloyds cruft to Sabadell cruft.
Churn is triggered by outages and other bad emotional experiences. It's rarely fully rational. There's a revenge drive involved. In this case, it seems to be pointed against the whole class of incumbent, traditional operators. Moving to another of them would have not satisfied that drive.
I don't quite understand this logic. Sure there was a very inconvenient failure. But the reaction is the move your money away from established banks with thousands of employees to an app-based startup? No, not for me, thank you.