Tesco Bank sales dipped by 3.7% for the first quarter 2012 as the high street retailer diverted resources to completing its migration to a new technology platform.
The banks says that it transitioned 2.8 million credit card accounts to the new platform in May, completing a lengthy and at times troubled migration.
Unlike competitor chain Marks & Spencer, which last week unveiled plans to open 50 new instore bank branches through a long-standing partnership with HSBC, Tesco ditched its erstwhile banking partner Royal Bank of Scotland in 2008 to adopt a go-it-alone strategy for its move into full-scale banking.
But the retailer has suffered successive delays switching accounts across to a new Fiserv-supplied Signature core platform. In October, the supermarket chain elected to delay its push into the full-service banking market for fear of repeating a series of technical mishaps that locked out customers during the prior summer switch to the platform.
In a brief trading update Monday, the retailer says it has now completed the final migration phase to the new technology infrastructure after devoting increased planning, resource and focus to the project.
"The extended migration slowed down the progress of Tesco Bank," the statement continued "and has contributed to overall revenues being slightly down compared to last year, exacerbated by a more competitive car insurance market."
In February, Tesco further signalled that it would put back the launch of its current account service until next year, citing the planned introduction of an industry-wide account-switching system for the delay.