IT fault forces Co-op bank to close doors on new small business customers

THE Co-operative Bank has turned away new small business customers due to an IT fault that is expected to last at least until the summer.

The firm, part of Co-operative Financial Services which is in the process of merging its operations with the Britannia Building Society, said the problem affects its internet business banking system – although it said large corporate customers with turnovers above 1 million were unaffected.

A spokesman denied the problems stemmed from teething pains with the merger.

Ken Greig, who runs communications firm Ken Grieg Associates, said: "I'm looking for a different bank at the moment but when I rang the Co-op I was told they weren't taking any new business from small businesses to the end of June.

"At the moment most companies are reviewing the banks they are working with. I was surprised they weren't taking any new business clients at all. It's not a problem for me but sounds like it is for them."

A spokesman for CFS said only a "small proportion" of the group's 90,000 small business banking customers were affected by problems with the website.

"We have had to make sure any disturbance to these customers is kept to a minimum, which is why we put this temporary closure on new customers coming through," he said.

The bank had put on extra advisers to assist existing customers if they ran into problems online.

The spokesman said the problems stemmed from an unexpected increase in new customers to the small business banking service.

"It is not an issue with the system per se. It was fit for purpose when it was first developed but with the volume and increasing numbers it is no longer providing the service we would normally expect, which is why the new system is being developed and – we hope – implemented in the next couple of months," he said.

"The withdrawal of online business account applications is only temporary and for a short time. We anticipate that all business accounts will be re-opened following the launch of our replacement internet service, Business Online Banking, this summer."

Last year CFS launched corporate banking centres in Glasgow and Edinburgh. The bank confirmed it has 196 corporate banking customers in Scotland.

The Co-operative Bank, part of Co-operative Financial Services, last year agreed to merge with Britannia Building Society to form a "supermutual" with 70bn in assets and 12,000 staff. The merger, a three-year process, started last summer following a vote by Britannia members and the passage of new legislation allowing mutual organisations to merge.