One of the UK’s most revered retailers, Marks & Spencer, has revealed it plans to open an in-store branch banking service this summer, in conjunction with its partner HSBC. The first bank branch is planned for July at the retailer’s flagship Marble Arch shop in London’s West End, with a further 50 branches to follow over the next two years.
M&S Money became a joint venture in 2004 with HSBC running the entire operation and any profits, accruing mainly from its three million customers in card schemes, loans, savings and in-store bureaux de change, is split equally between the partners. Online and telephone banking options are already available.
The financial services arm of the retailer has never offered a branch or current account service before, but says it plans to do so by the autumn, with the July flagship launch mainly operating as a registration and marketing exercise. It is breaking new ground with this latest move, however, which is no doubt designed to attract customers disgruntled with the reduced competition in High Street banking since the crash of 2007 onwards when Northern Rock, Alliance+Leicester, HBOS and many other institutions disappeared either through bailouts or forced mergers with other retail banks.
Metro Bank, Tesco Bank, which previously broke from its jv partner RBS, and others – not least the revamped Rock which is now Virgin Money – are all now trying to break into the UK retail banking scene, which has been accused of a lack of competition post-crash and is subject to intense scrutiny.
M&S Money will still use its own authorisation from the Financial Services Authority in the UK, separate from HSBC’s banking license, so any savings with both banks will be treated separately under the UK’s Financial Services Compensation Scheme (FSCS) which guarantees up to £85,000 of retail bank savings.
The in-store bank branches will follow the retailer’s opening hours, which are longer than most bank branches, no doubt providing another motive for the launch. Mortgages will also be launched at an unspecified later date, said M&S Money. Meeting rooms and relaxed seating will be deployed in the new shop bank branches, rather than traditional counters
According to Colin Kersley, chief executive of the new M&S Bank: "This is an evolution into current accounts and banking.” The fact the new bank isn’t starting from scratch with new systems and IT could be a benefit, at least initially in terms of launch speed but it will be reliant on its HSBC operations partner for future upgrades and tech-savvy offerings in the mobile space and elsewhere.