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?