Tesco delays launch of current account
TESCO Bank will not launch its current account in 2012 as expected, hitting the government’s attempts to shake up the notoriously uncompetitive retail banking market.
The supermarket’s financial services arm had planned to unveil its flagship product this year but is now set to launch at the end of 2013.
The delay will allow the firm to take advantage of forthcoming reforms designed to simplify the process of switching accounts.
A spokesman said the bank is “progressing at the right pace” in its efforts to offer a full banking service but that it will “continue to take a cautious approach to launching new products”.
The Payments Council, the group responsible for the future of financial transfers, promises that by September 2013 it will be possible to redirect regular payments from one bank account to the other within a week, making it substantially easier to switch providers.
Clive Black, an analyst at Shore Capital, said the launch date of Tesco’s current account is “towards the end of both our and their expectations” but backed the firm’s decision to delay the launch: “It is critical that Tesco Bank does these things right first time”.
The supermarket has quietly built a bank from scratch, expanding from 250 to 3,000 employees during the last four years. It currently offers a basic range of savings products, personal loans and credit cards.