First Direct, the HSBC-owned online bank, is launching a targeted campaign to support its controversial decision to axe interest payments on current accounts.
The bank says it is “reshaping” the market and helping customers earn “serious money on their savings rather than small change on their current account”.
It is the first bank to announce it is scrapping interest on current accounts for customers with positive balances. It hopes the campaign will stop any backlash by keeping account holders informed about the changes.
Last year, First Direct introduced a £10 monthly fee to customers not paying in more than £1,500 per month in an effort to cut down “dormant” and unprofitable accounts.
First Direct is replacing two existing current accounts, which pay up to 2% AER on positive balances, with the new 1st Account in November.
The telephone and internet bank has defended the decision, saying that all money saved through the initiative will be ploughed into giving customers better savings and overdraft deals.
The bank will also offer customers free “red alerts” by text message to help prevent them going overdrawn, a service which currently costs £30 a year.
All 1.2 million First Direct customers will be targeted with a direct mail information pack outlining the changes. The bank is also launching a video podcast and is planning a number of other digital initiatives and campaigns.
It is thought that JWT Digital has been briefed to develop campaigns. JWT Digital, an offshoot of Manchester agency CheethamBell JWT, has been appointed to the bank’s roster to develop its digital and direct response strategy.
Previously, First Direct worked with a number of digital agencies. JWT Digital is developing a community-focused strategy for the bank’s website. Direct response work will include press and online.