# Why Co-op Bank shouldn’t rely on its past to get it to its future Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2020-10-15 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Co-op Bank: Navigating a Timeline of Turmoil Meta Description: Discover the ups and downs of Co-op Bank's journey, from past mistakes to future innovations under new leadership. Learn more here. URL: https://financedigest.com/why-co-op-bank-shouldnt-rely-on-its-past-to-get-it-to-its-futurehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/untitled-design-2020-10-15t120250-1736838802030-compressed.jpg) _By Rebecca Crook, chief growth officer at_ [_Somo_](http://www.somoglobal.com) It’s easy to look at struggling businesses and their response to these turbulent last few months. But for Co-op Bank, the catalogue of errors goes right back to 2009.  Since then, we’ve seen a timeline of short-sighted thinking, slow if not stagnant progress and now the resignation of boss Andrew Bester, the sixth to leave in nine years. **Fighting fires and legacy systems** 2009 saw the doomed merger of Co-op Bank with Britannia [Building](https://www.financedigest.com/building-the-bank-of-you.html "Building the Bank of You") Society,  the result almost causing Co-op Bank to consequently collapse. Britannia had a huge [commercial property](https://www.financedigest.com/analysis-crisis-radar-falls-on-fault-lines-in-europes-commercial-property.html "Analysis-Crisis radar falls on fault lines in Europe’s commercial property") loan book and Co-op had governance issues around its approach to risk when lending money to customers. In this desperate attempt to modernise having been left behind by other banks, Co-op didn’t foresee the struggles they would [face incorporating Britannia’s legacy IT systems and challenges](https://www.financedigest.com/how-to-overcome-the-challenges-faced-by-women-in-business-4.html "How to overcome the challenges faced by women in business"). This was also coupled with its own large IT project that had commenced this contributed to the £300million capital shortfall. From a brand perspective, this was hugely damaging. As a bank, [Co-op has always tried to align with being an ethical choice for consumers – this was contradicted by a legacy of miss-selling PPI which put them right back into the same box as the other banks](https://www.financedigest.com/britains-co-op-bank-confirms-tsb-approach.html "Britain’s Co-op bank confirms TSB approach") and shrouded them in mistrust. What followed included multiple short-lived CEOs, a drugs scandal and a significantly tarred brand reputation making it even harder for potential customers to buy into the ethical stance. Fast-forward to 2018. Andrew Bester became the new CEO [following his role as head of commercial banking](https://www.financedigest.com/uk-watchdog-contacts-banks-following-huge-withdrawal-of-mortgage-deals-ft.html "UK watchdog contacts banks following huge withdrawal of mortgage deals -FT") at Lloyds after the recession. He was responsible for finalising the separation of the legacy IT systems held by the former parent the Co-op Group, which was no easy task for anyone – remember the [TSB and Lloyds banking disaster?](https://www.computerweekly.com/blog/Fintech-makes-the-world-go-around/TSB-IT-system-chaos-as-bank-cuts-rope-from-Lloyds-systems) The online banking systems required a complete overhaul to allow customers to manage and move money and to allow new customers to apply for new financial products. The progress seems to have been positive, leading to the creation of 100 digital-focused jobs at the [head office](https://www.financedigest.com/impact-com-appoints-mike-head-as-cro-and-jenna-mills-as-director-public-relations-promotes-cristy-ebert-garcia-to-chief-marketing-officer.html "impact.com appoints Mike Head as CRO and Jenna Mills as Director, Public Relations, promotes Cristy Ebert Garcia to Chief Marketing Officer"). His loss will no doubt be felt but the bank now looks to be more on course for [positive change](https://www.financedigest.com/the-meta-trends-driving-positive-change-for-financial-services.html "The meta trends driving positive change for Financial Services") should the right decisions continue to be made. **The role of Co-op’s new CEO** The [next CEO](https://www.financedigest.com/factbox-long-serving-qantas-executive-vanessa-hudson-named-as-next-ceo.html "Factbox-Long-serving Qantas executive Vanessa Hudson named as next CEO") must prioritise how to attract younger customers from outside of the bank’s traditional heartlands – those who can start a new relationship without the associations of the olden days. For this to happen, the bank [must work on continually innovating by creating digital products that truly serve the needs of customers](https://www.financedigest.com/lost-in-translation-why-banks-must-learn-the-language-of-their-customers.html "Lost in Translation: Why Banks Must Learn the Language of their Customers") and that provide the user experience that makes banking with them enjoyable and rewarding. We recently surveyed 1000 UK [consumers on how digital tools could make experiences with brands and industries](https://www.financedigest.com/uk-consumer-industries-warn-curbing-energy-support-will-hit-demand.html "UK consumer industries warn curbing energy support will hit demand") more positive. Almost two-thirds believe tools such as online branch appointment booking systems and online cheque-cashing scanners would help [improve experiences](https://www.financedigest.com/what-vrps-should-do-to-improve-the-experiences-of-open-banking-consumers.html "What VRPs should do to improve the experiences of Open Banking consumers"). The new CEO should also look to leverage the positive work that has already been done to help real people in tough times – for example, the connections with local communities that place them in a stronger position, how they treat staff and how they operate for [customers looking for more support](https://www.financedigest.com/why-now-is-the-time-for-banks-to-use-their-data-to-support-customers.html "Why now is the time for banks to use their data to support customers"). [Humanity should sit at the core of the brand’s messaging – customers](https://www.financedigest.com/customized-innovation-to-drive-the-human-microbiome-market.html "Customized innovation to drive the Human Microbiome Market") want help and guidance now more than ever. Another option could be for the bank to become a B Corp, placing even [higher importance on meeting high standards of social performance and transparency at a public and transparent level](https://www.financedigest.com/u-s-dollar-drifts-higher-yen-heads-toward-level-that-prompted-intervention.html "U.S. dollar drifts higher; yen heads toward level that prompted intervention"). This could help in re-enforcing those traditional brand [values whilst building deeper and stronger connections with both new and existing customers](https://www.financedigest.com/cracking-the-code-of-customers-future-value-in-retail.html "Cracking the code of customers’ future value in retail"). This could also lead to new ways of [communicating regularly with customers](https://www.financedigest.com/why-poor-customer-communication-is-holding-open-banking-back.html "Why poor customer communication is holding open banking back") to inform how it develops and iterates, very much like Monzo have done. This would keep them on the front foot of what [customers want and expect](https://www.financedigest.com/banking-from-anywhere-embracing-technology-to-exceed-customer-expectations.html "Banking from anywhere: embracing technology to exceed customer expectations"), what works well for them and knowing and understanding what elements are becoming sticking points. But this ability to take on feedback to innovate and progress will ultimately ensure they can respond more quickly to [market changes](https://www.financedigest.com/sterling-little-changed-after-mixed-labour-market-data.html "Sterling little changed after mixed labour market data") and remain a financial institution that collaborates with customers and therefore becoming more meaningful and trusted. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---