Unconventional F.I. Products Part 2 - Post Offices & Tesco

This post discusses a few  banking products launched by a post office and a supermarket chain.


POST OFFICE OFFERS C/A & S/A

InMay 2013, thisismoney.co.uk reported that U.K. Post Office has announced current accounts for its customers.

"Two of the three accounts carry a monthly fee, while the other is a ‘free’ standard account. All will be offered in partnership with Bank of Ireland UK.

The three accounts on offer are named Standard, Packaged and Control. It says each has been designed to appeal to different customer needs."


TESCO JOINS IN

"Tesco Bank will also offer a current account within six months, having hired 300 staff in Glasgow and Edinburgh to support the launch.

There are few details currently but Tesco is likely to target its 16m loyalty Clubcard customers. A mortgage product launched in August 2012 offers Clubcard points."

Source: www.bbc.co.uk

This service will continue for a period of 13 months, to cover any once-a-year payments, such as insurance premiums or the television licence fee."

 Source: thisismoney.co.uk

Imagine the potential of reaching every corner of  the country in U.K. with the vast network of post office branches in villages and small towns  where banks are unable to cater to.

One of the issues i foresee is whether the bulk of banking customers are willing  queue up with customers buying stamps, filling up forms for international shipments & parcels for a one stop solution. Not forgetting whether the Post Office's interest rates are competitive. A very simple yet effective concept.

Offer CA, SA, and other financial products to your existing shopping customers. Offer them benefits and perks offered by your departmental stores.

This effectively eliminates the middle man in credit card reward programs offering discounts in certain places and free gifts exchanged with points.


NEW CONDITIONS

As a result 17 banks, involving 33 different brands, are promising that switching accounts will now be much quicker and hassle-free."

All these new emerging players are thanks to a new switching service started on 16 September.

"The service is being launched following a recommendation from the Independent Commission on Banking two years ago, which said that people only changed bank accounts once every 26 years on average.

Logically a transfer of account from 1 bank to the other would require tedious procedures in documentation and migration of customer's info and existing cyclical payment details like payroll and payment of debtor's A/C & Bills.

With the introduction of Switching Service, all these will sorted out by the new provider seeking to increase its market share.

"The new provider will arrange for all direct debits and standing orders to be redirected to the new account. Payments in, such as from an employer, will also be redirected.
Source: www.bbc.co.uk

VIEWS
We can forsee a consumer's market on account opening with small players becoming agressive with emerging of unconventional new players.

This is comparable to how telco-players have evolved with free phones, calls & SMS to get customers subsribed.