/ Money

This is not just a bank… this is an M&S bank

Marks and Spencer has been around for over 125 years and is popular among its customers in a way that banks can only dream of. But do we really want to do our banking at the same time as shopping for socks?

M&S has announced that it will launch a full banking service, including current accounts and in-store banking, but the retailer is far from new to providing financial services.

It launched its first product, the M&S Chargecard (its in-store credit card), in 1985 and since then has expanded under the M&S Money brand to provide insurance, credit cards and savings. Its forays into these areas could be deemed a success – indeed, the retailer is a Which? Recommended Provider for car and home insurance as well as for credit cards.

Metro, now M&S – new banks on the high street

And there’s plenty of evidence that M&S could flourish in the banking industry. Metro Bank, which in 2010 was the first new bank to enter the high street in a century, has been a major hit with customers, opening more than 80,000 current accounts despite its branch locations being limited to just Greater London. The bank also recently announced it will be opening seven new stores by the end of 2012 – taking them up to 19 branches.

And M&S looks like it will follow the Metro Bank model of focusing on customer service and making banking convenient. M&S banks will be based in stores and they are planning to open 50 over the next two years – the first in their flagship store in Marble Arch.

The banks will be open throughout store hours, allowing customers to bank and shop seven days a week. Customers will be able to use a self-service area or be seen in a seated area rather than at counters. And we’re even promised flowers!

But will it be different enough?

But providing a fully-fledged high street banking service is a significant step and not a guaranteed success. Last year Tesco Bank scrapped plans to open a network of in-store banks after experiencing problems with its pilot branches.

Another potential sticking point is that M&S Money and its new banking services are half owned by HSBC, which will be providing all the back-office support. So although M&S will make the business decisions, essentially any customer of M&S Bank will be a HSBC customer. This may dull the appeal slightly for people seeing this as a chance to bank with someone new.

It’s also a big risk for a company whose worst headline in recent years was Jeremy Paxman complaining about its pants, to enter the murky world of banking. Consumers often think banks are as bad as each other, and M&S needs to be cautious not to be dragged down with the industry’s damaged reputation.

Personally, though, I think anything which can add diversity and competition to the banking sector is a good thing. And if M&S Bank puts the customer experience at the heart of services, then perhaps there’s a chance it could help drive up standards across the industry.

So, does the promise of sitting on an M&S sofa to do your banking appeal to you? Or do you think there are other, better things that could shake up high street banking?

Comments
Member

Well I for one won’t be tempted to switch to an M&S bank. As I don’t see it as being any different from all the rest. I’m happy with my wholly owned by HSBC bank. Having a bank effectively split I can foresee emails exchanges along the lines of “it’s not our problem fault”, “oh yes it is”, “oh no its not” and the only loser in that scenario is the customer.

Member
John Symons says:
12 June 2012

I agree. I would not like to have to appeal to an M&S credit card organisation over a dispute with M&S.

Member

That’s a really good point, William – I expect if they do want to succeed they’ll need to make sure there aren’t any odd splits like this in the customer service. I’ve had problems with this sort of thing before from *within the same company*, so with two companies involved, they’ll have to be careful not to make people feel like they’re being passed around.

Member

I wholeheartedly agree. Having been involved in a ding-dong between Barclays and M&S Credit Card over a payment that somehow didn’t reach the right account and led to the accrual of ludicrously disproportionate charges we personally would give M&S a wide berth for financial transactions. Barclays didn’t put a foot wrong, incidentally, and went well beyond the extra mile to try to resolve the problem whereas M&S were in denial, churlish, ungracious in defeat, and mean in redress.

Member
John Symons says:
12 June 2012

It’s not just a bank. It’s an HSBC bank that will presumably pay commission to M&S and therefore increase the average cost of running an HSBC account. Guess who will ultimately pay that commission. This is nothing new. When I withdraw cash from my local Sainsbury’s “Sainsbury’s Bank” ATM I receive a Clydesdale Bank receipt. I buy my Christmas food from M&S, not a bank, so I will keep on banking at Santander.

Member
John Symons says:
12 June 2012

I replied to you, William, and for some reason my reply was not posted, despite my being told when I tried again that I had already posted that comment.

I agree. I would not like to have to appeal to an M&S credit card organisation over a dispute with M&S.

Member

Sorry about that, John – our spam filter was a bit overzealous on this occasion. I’ve approved your original post.

Member
FINSBURYPARKER says:
25 June 2012

I replied to you, William, and for some reason my reply was not posted, despite my being told when I tried again that I had already posted that comment.
______________________________
Sorry about that, John – our spam filter was a bit overzealous on this occasion.
I’ve approved your original post.
_____________________________________

‘Spam Filter or, ‘Moderator’?

Member
Dave says:
12 June 2012

I note that in past years HSBC provided customers of M&S better value ISAs than it gave HSBC/First Direct Customers so maybe they are prepared to see it compete as a separate brand. I wouldn’t change from First Direct (HSBC) however for banking services but if they were to bring in charges maybe think again.