Posts Tagged ‘tesco bank’
Tesco have made a big technological step with the successful launch of their Hudl tablet, and now they’re getting serious about banking. They’re currently having a recruitment drive ahead of the 2014 launch of its first range of current accounts.With confidence in many high street banks low, Tesco have timed their run perfectly.
Benny Higgins, chief executive, said: “We are making excellent progress towards the launch of our current account next year and the recruitment of these new roles is an important milestone in that process.”
Tesco launched their banking service in 1997 as a joint-venture with RBS. Since then, Tesco took complete control over the business and is looking to expand, on top of their credit card wing which saw customers spending £12bn a year with them. Tesco are also raking it in with their personal loans, currently topping industry rankings by sales.
Benny Higgins continued: “This is all about ensuring we can offer the best service to our customers. Everything Tesco does is done with our customers in mind and our current account will be no exception.”
So, what was once Tesco Personal Finance is now Tesco Bank and the company got rid of all staff sales targets and bonuses connected to selling products, as Higgins saying: ”I took the view that incentives and targets are ineluctably corrosive. That single move refocused people on focusing on the customers.”
Crucially, Tesco have built a bank using new, reliable IT and computer systems, which means they’ve got one up on their old partners, the RBS Group.
Will Tesco be able to convince you to switch banks, or are you wary of how big the retailer is already?
After much anticipation from some people without much else to do, Tesco bank have finally unveiled their first mortgage offerings. And they are pretty underwhelming.
Largely fixed rates, their best rate is 3.19% fixed for two years, with a 70% max LTV, although higher rates are available with a deposit down to a minimum of 20%.
While 3.19% isn’t a bad rate, it is far from market leading, with high street names like HSBC already offering 2.99% fixes for five years. Ray Boulger of mortgage brokers John Charcol chuntered “any hopes that the entry of Tesco would produce a significant increase in competition have been dashed, at least initially, by its opening rates, which seem to be designed more to avoid getting too much business than to ruffle the feathers of existing lenders.”
“Its opening rates would have been competitive a month ago but not now, unless Tesco has re-defined the word competitive,” he grumbled.
The big USP for Tescos is the fact that you can get Clubcard points on your payments, and you even get your Clubcard points (4 points per £) on all repayments you make, not just on the interest. You are also allowed to make up to 20% of the outstanding balance repayments each year without penalty, and those get Clubcard points too.
However, assuming a mortgage repayment of £1000 per month, that would earn you 250 Clubcard points a month, or 3000 Clubcard points a year. Given that 1 point equals 1p, we are not sure that £750 of Clubcard rewards over 25 years is a desperately exciting incentive. But we could be wrong.
Still, being able to go hundreds of thousands of pounds in debt while buying nappies and milk is what this country has been crying out for, no?
Tesco, determined to take over the entire world and every aspect of your living life, have announced that they won’t be launching Tesco Bank’s current account until next year.
Of course, the supermarket already deals in insurance, credit cards and savings and is a subsidiary of RBS, but following a series of computer glitches which locked customers out of accessing their savings account, they’re putting their ”full-service bank for Tesco customers” on hold.
A spokesperson said: “We are currently in the product development phase. Our launch timings are not yet confirmed but will be driven by delivering the right product for Tesco customers, as well as the speed of implementation of new industry-wide systems to help customers switch current accounts more easily.”
This is in reference to The Independent Commission on Banking who, last year, recommended changes in the banking world to improve the system by which customers can switch bank accounts.
Tesco Bank is being seen as a serious contender on the high street… but would you want to bank with them?