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Why Santander doesn’t work (yet)

Building on the theme that First Direct works as a bank without branches, why isn’t Santander working as a bank with branches.

In the UK, Santander is rapidly acquiring branch footprint having taken over Abbey, Alliance & Leicester, Bradford & Bingley and, more recently, a further 318 branches from Royal Bank of Scotland.

Santander is now one of Britain’s biggest branch-based banks.

They offer good rates too, and have been growing business rapidly by offering discounted mortgage rates and higher-than-average savings rates.

This is why their business has been on the up.

But is it sustainable when their service is rotten.

They can’t issue debit cards, they mess up on direct debits, they have customers who can’t access online accounts for frequent periods and ATMs won’t dispense cash due to incorrect account information … and so on, and so on.

Sure, they are going through systems upgrades and teething troubles, and this is something I’ve talked about often, but come on. How long can you ‘blame the system’? Seems to me there’s something more fundamental here.

And this is illustrated by three charts from Matt Colebrook’s (First Direct) presentation to the Club.

The charts were extracted from figures published by one of the world's largest market research firms and showed that First Direct had a 23% gap over the market average for all UK banks for customer satisfaction; increasing to a 31% differential when just reviewing satisfaction levels for call centre services; whilst internet satisfaction is 13% higher.

In a market where everyone claims it can be difficult to differentiate – where the internet makes banking just some faceless, functional service – the bank maintains a considerable service gap over their competitors.

All good stuff.

But the real point I noted from the slides Matt used, which compared First Direct's satisfaction ratings with thoser of all other major UK banks, is that dragging along the bottom in every slide, with the lowest satisfaction ratings, is Santander.


Well, I've blogged often (and much to their annoyance) that they have problems with service due to systems.

The issue is well illustrated by the recent FSA announcement of complaints.

UK banks receive 7,000 complaints per day on average.

That sounds bad but it’s actually decreasing. In 2009, over 10,000 complaints per day were going through the system.

When these results came out, Lloyds were criticised as the #1 culprit for complaints, but the Lloyds-HBOS merger created some of those and, bear in mind, this merger has made them the UK’s biggest bank.

So, scratch underneath the surface a little, and waddyafind?

“Santander, which took over Alliance and Leicester and the savings arm of Bradford & Bingley in 2008, received 244,978 but was criticised for only resolving 46% of those complaints within an eight week period. Lloyds resolved 97% of complaints within eight weeks whilst Barclay’s closed 91% of complaints within the same time period.”

I think it speaks for itself that Santander, today, is just plain inefficient.

In fact, the only reason I think they’re getting any business is on rate churn.

That’s not sustainable, so I look forward to the day when they sort out their business model and start getting it right.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • firstdirecthereicome

    Lost debit card 2 weeks ago. Time to reissue – c 10 days. Time to get a pin out? Pushing 16! What the hell!

  • I was one of the people who lost access to an online account recently. It took 8 weeks, numerous complaints (all ignored) and a letter to the CEO for anything to be done. Oddly enough during the period that the account was allegedly inaccessible, they managed to downgrade it (without notice) to another account type paying lower interest. There was also evidence that they weren’t following KYC properly either.
    You’re absolutely right about rate churn. Also laziness – I will be closing all my accounts there but getting round to it is another matter.

  • dave

    totally shit bank, all they care about is selling your product after product, you go in for a savings account and leave with a mortgage and credit card. Disgrace of a bank