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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.”

  • Michael Martin-Smith

    What is needed and is long overdue is a MAJOR reduction of the cost of energy for ALL consumers-; to make up for the outrageous increases in prices over the past few years, a 30-50% reduction across the board within a year would be a good starting point. Anything else is mere flannel, and we know it.

    Unless and until this reduction by a cut-throat price war happens with the overt connivance of all regulatory bodies, all bodies concerned with Energy in the UK will attract the same opprobrium as the Banks, and rightly so
    MPs, please note; if you want to give UKIP an open door- carry on regardless…!

  • Jesuit

    Standing charge has always been there. It was just hidden behind the tariff. You all pay line rental don’t you? Well that is standing charge. It costs to maintain your supply. On the back of that many unit prices will drop.

  • Peter Watt

    wish they would p**s off for years they have sat on the hands and done nothing and they have done some thing i am up the the neck in debit and i am not even using my gas cheers OFGEM thanks to you clowns i now can’t afford to put my gas on transco mite as well come take my meter out the house

  • Jeffrey rogers

    I am a pay as you go customer with British gas. British gas is charging me for not using my gas as a typical example. I just put a total of ten pounds & British gas took nine pounds what a rip off

  • Martin R

    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.

  • john oregan

    howlong will it take swicth accounts

  • http://uswitch.com Jafar Hassan

    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/

  • KATHLEEN FARMER

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

  • http://uswitch.com JAFAR HASSAN

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

  • Brian Stockley

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

  • Timothy Sykes

    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

  • ernie

    will they have like other banks agreed overdrafts

  • Juicebuster

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

  • Nick TW

    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

  • Peter Francis

    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

  • Peter Hogben

    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

  • John

    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.

  • KEITH GRANT

    ARE THEY SAFE

  • John Woods

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

  • steve olley

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

  • Frank

    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.

  • pkelson

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

  • http://none Alexander Washington

    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.

  • Bennie

    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.

  • Ian

    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.

  • Rusty

    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.

  • http://tom.harrison@lloydstsb.co.uk Tom

    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?

  • William

    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

  • Jacqueline Mary

    Thanks to Ofgem’s “reforms” I now have to find an extra £90 a year on my gas bills and I am on a low income. Ofgem only care about making money and couldn’t care less about the customers!

  • Michael Martin-Smith

    Fine, but what is really needed is a price cutting war; until we get one, the Energy Suppliers stand accused of running a cartel- which is illegal, believe it or not, under EU rules.

    If the Government +/- the EU does not crack down hard on the Utilities and force them to compete seriously in reducing prices, UKIP can expect bonanza in 2015.

    Even a politician can understand that kind of threat- to be helpful, the word “UKIP” is a four letter one and most people can spell it…

    4 millions in energy poverty could translate into a lot of UKIP votes..

  • Jesuit

    This is the most idiotic tripe I have ever read. Well done.

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