The challenger bank is continuing to invest in migrating its banking platform from the one provided by Lloyds Banking Group to a new state-of-the-art platform designed and built with Sabadell. 

As well as enhancing the banking experience for customers, TSB hopes that the new platform will reduce its costs considerably. 

The challenger bank has seen a contractual increase of more than £100m in the outsourcing fees it will pay to Lloyds Banking Group this year, which will continue to drive a significant reduction in its underlying profit before tax.

TSB believes the move to the new platform will reverse these costs in future years and will also provide opportunities for the bank to become more innovative and agile in responding to its customers’ evolving banking needs.

“As we prepare for the transition to our new banking platform, it’s important to us that we continue to deliver excellent service to our customers,” TSB announced in its half-year report.

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“In order to ensure that we continue to do this, we have been growing our lending less quickly in the second quarter of the year and will continue to grow this less quickly over the coming months. 

“We expect to reverse this slowdown as we move into 2018.”

During the first six months of 2017, TSB provided over £4bn of new mortgage loans, up 24.4% on the same period last year. 

Paul Pester, CEO of TSB, said the bank was continuing to challenge the stranglehold that the big five banks had on the market. 

“We’re getting set to move to our brand new, state-of-the-art digital banking platform towards the end of the year. 

“Changes are already afoot for our customers with the launch of our new mobile banking app in April, and [recently] we were the first bank in Europe to announce a partnership with Samsung to integrate iris recognition into our mobile app.”

However, Paul said there was still plenty to do as it continued its mission to bring more competition to UK banking.

“We’re laying the foundations now to bring much-needed competition to the small- and medium-sized business banking market next year – when we’ll take on the big banks and provide more support for local businesses, which form the lifeblood of the UK economy.”