In reference to “Clearing banks lay new Eggs” (MW October 21), before we all get swept away by Internet banking euphoria, let’s remember one thing: banking online doesn’t suit everyone.
Yes, the Net generation may have been seduced by the marketing machines driving these new direct banks, but aren’t we forgetting something?
Customers still like choice – a choice of products through a choice of service delivery channels: call centre, branch, cash machines, Internet, even mobile phone. It’s not that Net banking isn’t a good thing, just that it should be part of a multichannel strategy.
Of course, no one would try to argue that traditional banks such as Lloyds TSB have been quick to offer Net banking. Neither would they argue that traditional brands won’t face more change to their established structure. After all, they still need to identify how a variety of products, such as banking, mortgages, insurance and pensions, can be delivered efficiently and cost-effectively through multiple channels – all potentially marketed under different brands.
But this news is a significant step in the right direction. With established, and significantly larger, customer bases, traditional banks should be able to wring economies of scale, allowing them to out-price the new kids on the block.
So could Lloyds’ move to set up a dedicated Net bank scare the likes of Prudential’s Egg? It could, but only if Lloyds can “out-market” the new direct banks.