James Daley

By James Daley

Later this year, Santander will mark 10 years as the owner of what was once Abbey National. It's been a turbulent decade, during which the Spanish bank has lurched from one bad news story to another.

Customer satisfaction levels were poor before Santander took charge, and have made no significant improvement during a decade of changed ownership. And while Santander has got off fairly lightly in terms of fines and censures from the regulator, it now seems to be putting that right as well, with a reported £12.5m penalty in the pipeline for poor investment advice.

Getting in the Abbey habit

During my time at The Independent and at Which?, I received more moans and groans about Santander than any other bank. And when we'd mystery shop them, they would often come out towards the bottom of the pile in terms of performance.

Much of this bad practice was, in my view, down to the way staff were incentivised. Branch staff would try and sell complex products to customers, without adequately understanding their appetite for risk. While advising a customer to put his money in a fixed term savings account may have been the right thing to do, the margin for the bank was much better on a structured product or investment bond, and that's what our mystery shoppers would find themselves being sold.

Or how about Santander's credit card activation team, who were for a while simply sales agents from the now disgraced CPP? While customers thought they were calling up to get their new card working, they were in fact being passed through to sales agents who were given carte blanche by the bank to give you the hard sell on an identity protection policy, which you probably didn't need.

Stories such as this have been common at Santander over the last decade - driven by senior management prioritising the bottom line over good customer outcomes.

Cock-up, not just conspiracy

But it wasn't all conspiracy. A major reason for Santander's poor customer satisfaction scores over the past decade has been poor systems. When Santander took over Abbey in 2004, its systems were something out of the IT dark ages - an era where computers filled whole floors of buildings. I remember my girlfriend walking into a branch of Abbey in 2004 and asking for a mini statement at the counter. They just couldn't manage it, and said that the best they could do was send her something in the post.

Things went from bad to worse when Santander bought Alliance & Leicester and Bradford & Bingley - two other former building societies with equally antiquated systems to integrate.

It's taken Santander millions of pounds and many years to upgrade and migrate all their accounts onto 21st century platforms - a job which still continues.

The challenger bank

Santander's track record is a great shame. Since it emerged on our shores 10 years ago, it has talked a good game about being a challenger bank that would shake up the high street. And in some areas, it has succeeded. Its 123 current account and credit card were innovative products that have been very successful.

But if it truly has ambitions to be a leader in the banking sector going forward, it needs to undergo a cultural shift, where the needs of the customer are promoted above the chase for short-term margin. Although that shift is often talked about, there's still little evidence of it - as is clear in Fairer Finance's ratings for the bank.