The world of financial reporting was startled last Friday (always a good day to catch people napping) with the announcement by Marks & Spencer that it is going to launch an in-store banking service this summer, in partnership with HSBC.
M&S aims to have 50 branches up and running in its stores in the next two years, with 500 jobs created by the end of 2013.
The high street banking sector has been due a bit of shaking up for a while, but what looks like an interesting tie-up still came out of left-field. On the face of it, this isn’t quite what the doctor ordered. HSBC is going to be the owner of the accounts and the customers, with a 50:50 profit share arrangement for M&S, so we’re not seeing the entry of a new player in the market, so much as an extension of choice (and convenience) for current M&S shoppers.
M&S and HSBC have a track record in financial product provision – M&S Money has been owned by the bank since 2004, and the extension into current accountsand mortgages looks like a logical extension. In any case, there’s always the possibility that if the new venture is successful then M&S might look to take things completely in house somewhere down the line – as Tesco Bank did with its divorce from erstwhile partner RBS.
Observers have been pretty unanimous in seeing this move by M&S as a range extension, rather than a genuine new dawn for High Street banking, but I wouldn’t be so categoric.
The same names have been coming up in the industry for a couple of years now as the big potential disrupters, but so far have made little more than a ripple; from Metro Bank with its vision of convenient, no-frills banking, through to Handelsbanken, with its proposition of “forward to the 1950s!” Both brands have real potential, but I wonder if there’s the space for them to grow to their full potential in a saturated market space.
The astute observer might keep half an eye on the Co-Operative Bank, which really ought to be making hay in the current climate with its avowedly and overtly ”ethical” proposition, yet which somehow hasn’t yet seized the moment.
In the meantime, we might have to look towards one of the nation’s great retailers for the next step forward in the banking industry – at least the packaging ought to be eyecatching!