Whoever disrupts the retail bank market, it might not be M&S
Posted by Matthew Wheeldon on July 18, 2012
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Today M&S unveils its much heralded (and briefly trailed) current account. The decision to go into high street banking looks well timed – whatever the current concerns over its fashion lines the public trusts M&S, and trust is in very short supply in financial services at present. Therefore, M&S going into current accounts and mortgages had the potential to be a good move.
Now we see the detail. It’s going to cost £20 per month with travel insurance, or £15 per month without. The £20 option is up there with the most expensive non private banking options on the high street, and in return you get vouchers off clothing and food and drink purchases in store.
So it’s basically a customer loyalty move – the big boys of high street banking can breathe a sigh of relief.
Or can they?
Nationwide and the Co-operative Bank have both reported strong week on week increases in current account enquiries in the wake of the LIBOR scandal, and the collapse of the RBS computer system. Nationwide in particular has been hammering home its message of being on the consumers’ side, with full page adverts and wraparounds on the business pages of the Sunday broadsheets. Also, if the Co-Op/Lloyds deal goes through, we could see the Co-Op with 7% of the market, and 10% of the UK branch network.
There are alternatives to the high street banks, and the signs are that people are starting to look more closely at them than ever before. This presents a challenge to the established players to up their game in understanding what their customers want, and to the new boys in terms of getting a distinctive message across that can explain why they are different (and, in an industry where trust can’t be taken for granted, why they should be believed…..).
The disruptor of the industry is unlikely to be M&S though, at least not on their current showing.