Santander has apologised for its abysmal service over recent months and has pledged to improve the customer experience for its 25 million account holders.
In a frank interview with MoneySavingExpert.com this week to answer concerns from angry site users, Steve Williams, Santander service quality and complaints director, says standards are already up from the depths of the service debacle in July and August (see the Santander service fiasco MSE News story).
The Spanish giant primarily blames the mess on the challenge of integrating three banks – Abbey, Alliance & Leicester (A&L) and Bradford & Bingley – and because it has attracted so many new customers through a succession of best buy deals that have stretched resources (see the Best Bank Accounts, Top Savings Accounts and Top Credit Cards guides).
At the height of the shambles over the summer, the key complaints, amongst many others, were:
- Thousands of A&L account holders lost access to their cash as they were switched to become Santander customers.
- Many direct debits were sent late.
- Customers were regularly left to wait in tedious branch and telephone queues.
- Savings cash was released at a snail's pace following account maturity.
A MoneySavingExpert.com poll in August found 62% of the 3,400 Santander customers sampled rated their experience as poor, making it the worst bank for service at the time.
Below, Williams answers customers' concerns (our questions in bold):
Do you accept Santander's standards slipped badly? If so, why?
"We know we need to do more. The reason is a mixture of the integration and attracting so many new customers due to our products.
"We have done something no-one has done in the UK in merging three banks and there have been some bumps.
"One of the issues of three banks coming together is the technology as we are moving everyone to one [computer] system. When I was at Barclays a few years ago, we had 15 systems just for loans.
"Here, we want one for everything which is a challenge and the new infrastructure will allow us to be a lot more competitive."
What is your message to customers affected by the chaos?
"Service quality is at the heart of what we do. But we have been in the thick of integration and we are sorry for the problems customers have experienced.
"But many of the major problems are now behind us and some have been fixed and we look forward with confidence.
"I took this job in April last year [after being HR director at the bank] and I am pleased at the progress we have made and further improvements will come but I am not pleased where we are."
When did it get so bad?
"In satisfaction surveys, Abbey in the last ten years has been at the bottom of the pile, we know, but A&L had a high level of customer satisfaction.
"In overall retail customer service complaints, we were doing well before the cash Isa season [in spring]. We had three times the usual Isa business because we were offering by far the best rate [at 3.5%]. In the peak of the season we had five times the usual volume."
Santander, with its £100 current account sign-up bonus, top Isa rate and other decent savings and credit card deals clearly has some very attractive products. Isn't this one of the problems, that you have chased so much new business, you would never have the capacity to maintain service?
"We are not just chasing new business at the expense of existing business. We used to spend 70p to make £1, now we have moved closer to 40p. That is why we can offer cash Isas at 3.5%, for instance. It also means we can invest in IT to improve service."
Will you be forced to make your products less attractive or limit them to existing customers to help manage service, as has already happened in some areas, such as Isas and credit cards?
"We have 25 million customers and we want to increase the number of products per customer.
"The emphasis is also on getting more current account customers. We still have a low relative share of the current account market and we want to compete fiercely and we can offer customers something better.
"We are fifth in the current account market with 9.1% market share so it's a journey to improve that."
You've talked about the general reasons for the poor service but looking at specific problems, what went so wrong that A&L customers had no access to their accounts, leaving many effectively cashless for a few days?
"There were a set of issues and we were two weeks late in dealing with them.
"One was the data held by A&L. It had a different approach to allowing third parties to deal with accounts than Abbey and when that was transferred it caused problems which meant some people who thought they had access couldn't log in because we did not feel confident, for security reasons, to allow them access.
"Some people also misunderstood account numbers, which were changed, so couldn't log in. Others tried to log in when the service was down for three to four hours on the same day and even longer on big migration days [when large numbers of A&L accounts became Santander accounts].
"We believe up to 18,000 customers were impacted. Complaints from A&L customers about the internet are usually at 80 to 100 a month but we got to 900 in July and 1,000 in August.
"We called people we thought were affected to make sure they had account access. But the A&L problems are now over.
"In the next couple of months we will be relaunching our internet sites."
How would you explain some of the other problems customers have experienced?
"There was also a problem with the A&L call centre where there was not enough support for staff. We suffered on handling times and we weren't meeting industry standards but that has improved.
"Queues in branches are still a problem, partly because there are not enough till points in some.
"There are other issues. For instance, many direct debits were late over the summer because we'd made mistakes but that's been rectified.
"Then, there are other things like some customers who lost a card would ask for a new one but when it didn't arrive and they asked, staff couldn't always see one had been ordered so it would be re-ordered. In some cases, five cards and pins would arrive.
"People who switched current account to us also didn't always experience the best service because we weren't always getting things right."
You mentioned some problems have already been solved but what more is Santander doing to improve service?
"We are recruiting an extra 600 people in our branches to help with the queues. We will also move staff around so we have as many people as possible during busy periods. We will also build more tills where the building structure allows us.
"While branch service has slipped, we are seeing the problem tail off. We are also recruiting 400 extra people in our call centres to manage service there.
"Improving service also involves speaking to customers and I've been in branches to ask for people's concerns. We also speak to 20,000 Santander customers regularly to get their views.
"We are also improving the switching service. It took 20 days last year to switch direct debits [from a rival bank to Santander].
"We were in the middle of the pack compared to the rest of the industry but by the second quarter of this year this was down to 15 days. The next best bank took 18 days.
"In terms of errors we make during the switching process, it has moved from 80 per 1,000 to fewer than 30."
You've talked a lot about branch service but are you committed to keeping all your branches open given many banks make closures after merging?
"We need just under 2,000 but we only have 1,300. We may close a branch in one area, but only where we have two or more in close proximity. But where we close one, we will relocate one somewhere else.
"Of the redundancies we have made, all have been in our back office so none have been in customers-facing roles such as in a branch.
"One of the ways we will build our branch network is that we have bought over 300 branches from the Royal Bank of Scotland (see the RBS/Natwest switch alert MSE News story)."
You've mainly touched on poor service as a result of mistakes that result in obvious frustration, but customers also complain that Santander is not as slick as other banks. For instance, credit card customers and savings account customers have to log-on twice to view their account online, credit card statements are not available online and statements sometimes contain four sheets of paper to declare a zero balance. Will this change?
"These are issues we will look at. They are on the shopping list."
One area where Santander scores better than any of its major competitors is the way it handles complaints, even though it gets a large number. Only one fifth of complaints about it to the Financial Ombudsman Service were upheld in the first half of this year which indicates most are dealt with fairly by the bank initially. Why is this?
"At the end of last year, we put in a new complaints framework to resolve the problem there and then wherever possible. We have seen the benefit of that but we acknowledge there is more to do. We don't want any compliant to last over four weeks, though where a customer is unreasonable it will last longer.
"We now have a complaints phone number that is open seven days a week that went live two weeks ago (0845 600 6014)."
What does the future hold for Santander customers when it comes to service?
"If we get the customer service right we will be the best bank in the UK, and we want to be number one. Santander has been very successful in terms of market share and in our financial position. Now we want to be known for good customer service."
Further reading/Key links
Complaining guide: Financial Fight Back
Top accounts: Best Bank Accounts, Top Savings Accounts and Top Credit Cards
Reclaim guides: Bank Charges, PPI Reclaiming, Credit Card Charges, Direct Debits, Setting Off, Mortgage Arrears, Endowment Mis-selling