Tesco set to shake up current account market with 2014 launch

300 jobs will be created to turn Tesco into one-stop retailer for shopping and banking

Tesco current account launch: ould 2014 see customers doing their shopping and banking in the same visit?

Could 2014 see customers doing their shopping and banking in the same visit?

Tesco have announced plans to offer a current account along with its existing banking products in 2014.

The move will create 300 new jobs and is expected to shake up competition in the current account market by offering more choice to consumers.

A spate of recent banking scandals including the RBS Group’s systems failure and this week’s record £28m fine to Lloyds for creating a “culture of mis-selling” could pave the way for Tesco to begin luring in disgruntled customers.

Despite Tesco’s retail arm losing market share to budget supermarkets such as Aldi and Lidl, and spending this year’s marketing efforts on restoring consumer faith following the horse meat scandal, the opportunity to break up the current account status quo is still clearly there.

Current account switch service

Since the launch of the Current Account Switch Service in September, customers have been able to change their bank accounts without much effort, with their main current account provider completing the switch on their behalf within seven working days.

The chancellor, George Osborne, has welcomed Tesco’s decision to enter the current account market and believes it is a “step towards a more diverse UK banking sector”.

“I want consumers to have as much choice as possible and the only way to do this is to encourage new, challenger banks to enter the market,” Mr Osborne said.

The rise of challenger banks?

Despite Mr Osborne’s positivity, many argue that challenger banks risk adding clutter to an already confusing marketplace unless the new current accounts can offer something different and more rewarding for consumers.

uSwitch personal finance expert, Michael Ossei, believes more needs to be done by banks to win over consumers’ trust, but says that Tesco could potentially start offering customers a one-stop retailer for all their shopping and banking needs.

“Regular shoppers will be hoping for additional benefits linked to the Clubcard scheme, so, regardless of what the rest of the market offers, Tesco is likely to win when it comes to convenience,” he said.

The bank’s main offices will be in Glasgow and Edinburgh, with 240 jobs going to customer service areas and the remaining 58 being recruited for legal, commercial, marketing and risk.

Benny Higgins, chief executive of Tesco Bank, 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.”

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24 comments

  1. Martin R on December 16, 2013 at 9:49 pm

    Well I hope transactions will go through quicker than at present. When one transfer money in / out of their savings accounts it takes much longer (okay, a few minutes) to happen. Other accounts happen instantly.

    Hopefully their current account will offer incentives to switch – my current provider, First Direct, offers a very useful fee-free overdraft for £250.

  2. john oregan on December 17, 2013 at 12:32 am

    howlong will it take swicth accounts

  3. Jafar Hassan on December 17, 2013 at 9:47 am

    Hey John, there’s no confirmation yet that Tesco will join the 7-day current account switching service, but it’s fair to assume that they would want to do that in order to compete with the rest of the high-street banks. You can find out more about the 7-day switch guarantee here: http://www.uswitch.com/current-accounts/guides/current-account-switching/

  4. KATHLEEN FARMER on December 17, 2013 at 10:15 am

    ARE TESCOS GOING TO OFFER ANY INCENTIVES TO SWITCH BANKS? IE. LUMP SUMS?

  5. JAFAR HASSAN on December 17, 2013 at 11:08 am

    HI KATHLEEN, I DON’T KNOW YET. WE’LL HAVE TO WAIT AND SEE. IT SEEMS TO WORK FOR FIRST DIRECT THOUGH.

  6. Brian Stockley on December 17, 2013 at 12:48 pm

    If Scotland go independent next year the Tesco bank offices will be in a foreign country!!!

  7. Timothy Sykes on December 18, 2013 at 9:47 am

    Will they be offering free Phone Insurance,RAC breakdown cover in Europe, Travel Insurance, Airport Lounges x4, and Key Cover,CCP Checks, say all for £15 pounds a month on a joint Account all that and a bit more for £90 pounds each

  8. ernie on December 19, 2013 at 8:42 pm

    will they have like other banks agreed overdrafts

  9. Juicebuster on December 19, 2013 at 8:46 pm

    I think Tesco are fantastic. I will certainly be signing up

  10. Nick TW on December 19, 2013 at 9:07 pm

    My views are that with head offices in Scotland its just another RBS fiasco although it could be good the public will not go for it – I would place the HO in Leeds or Birmingham niot somewhere already associated with Banking fraud and corruption

  11. Peter Francis on December 19, 2013 at 10:09 pm

    I have a credit card, broadband,telephone account and do all my grocery shopping with them but find talking to their Glaswegian office almost impossible with their accent so they will have to do something about that if they want custom from south of the border! Get that right and I will gladly switch to them for a current account

  12. Peter Hogben on December 19, 2013 at 10:31 pm

    As already pointed out, why Scotland, I am planning to remove any custom from companies in Scotland when and if they vote for independence and Scotland becomes a foreign country (RBS, Halifax, Intelligent Finance, Scotish Power etc)as I would rather use a UK company

  13. John on December 19, 2013 at 11:21 pm

    If Scotland gains independence, I and many other people will be wanting to change my Banking to an ENGLISH Bank, and will not want one based in another country. I am already in the process of looking at what is available as the Scottish attitude makes me want to no longer support Scottish banks anyway.

  14. KEITH GRANT on December 20, 2013 at 6:17 am

    ARE THEY SAFE

  15. John Woods on December 20, 2013 at 9:13 am

    They will find it hard to compete with first direct who offer an incentive of £150 to join and a free £250 overdraft.

  16. steve olley on December 20, 2013 at 11:21 am

    only of any use if it excludes riduculous inappropriate offers in return for a fee, and the account pays interest like the competition

  17. Frank on December 20, 2013 at 12:37 pm

    I won’t bother if they are just another firm (BBC is another) taking thier business to Scotland. As Brian rightly states; the could soon be operating their banking system out of a foreign country. And whatever Alex Salmon says he will love taking from the English.

  18. pkelson on December 20, 2013 at 2:31 pm

    If they offer a free case of wine I’ll go for it! Otherwise I’ll not bother to add yet another account.

  19. Alexander Washington on December 20, 2013 at 5:10 pm

    Why do English folk think the UK will exist when Scotland leaves? Wrong, the Kingdom will be split sono United Kingdom. And, yes, Scotland will be foreign. No longer getting less from Westminster than they put in. How will you manage? Your taxes will have to go up as the Scots are fed up subsidising you.

  20. Bennie on December 20, 2013 at 9:35 pm

    First of all, I live in Scotland and I would hope that you could understand my accent better than someone in India. On Scotland being a foreign country there’s not a chance of that happening, if you listen to “Alex” we will all be millionaires with all this oil that we’ve got, but I have yet to meet anyone I. Edinburgh who is going to vote yes.

  21. Ian on December 20, 2013 at 9:53 pm

    As already eluded to, if Scottish based forget it, been bitten already by RBS. Also won’t bank in a foreign country. Regardless of what Alec Salmond says, independence will cost Scotland lost buisness in the private sector he just doesn’t want to admit it.

  22. Rusty on December 30, 2013 at 11:08 am

    I am a patriot but not nationalistic I believe in the uk and I ,as will many people I know will vote No . The financial and legal pillars within the World never mind the Uk need to be brought back into a common sense world and not left to all sorts of individuals who are perhaps not really equipped for the job.

  23. Tom on December 30, 2013 at 11:26 am

    You do realise that Tesco Bank Chief Executive worked for both RBS and HBoS previously? Operating are senior management and board level he was party to all the decisions that brought both of them down. He also has a bit of a colourful personal life, having been in the tabliods several times. Would you really want to move to a so called ‘new’ bank run by the same team that wrecked retail banking already?

  24. William on December 31, 2013 at 8:20 pm

    Scotland has more people in employment than that of England as scotland is a smaller country they also export whiskey which is a big seller overseas and we have water generating electricity and oil