Tesco looks to stand out with crowd-sourced current account
Tesco Bank is positioning its current account as one “designed by customers” as it becomes the latest challenger to take on the high street banks with the launch of a crowd-sourced account.
Tesco Bank says the account has been designed after consultation with 20,000 customers to pinpoint “what matters to them”.
The account will be free to those depositing a minimum of £750 per month but at a cost of £5 for those that are not. It also includes the option of a mobile banking app and online banking.
It also appears to have been designed with the objective of boosting loyalty among existing Tesco shoppers as well as enticing new ones into stores with its offer of ClubCard points on debit card spend and a debit card that doubles as a ClubCard. Tesco unveiled last week that ClubCard and the volume of data the scheme captures would be key in its quest to turnaround declining sales.
Darren Shirley, retail analyst at Shore Capital, says it is a “cautious” launch designed to appeal to Tesco customers. He adds: ”We do not see it as a game changer for the British retail banking industry. However, its simplicity, transparency and interest-bearing features could appeal to more affluent, probably older, customers whilst the Clubcard component may lead to a little more commitment from what we call ‘Tesco loyalists’”
An in-store an online campaign targeting ClubCard customers will support the launch followed by a social and broadcast activity over the summer.
The current account market is becoming increasingly crowded with new entrants. The relaunched TSB, Marks and Spencer, The Post Office and Virgin Money have all rolled out current accounts in the past year.
Tesco Bank, wholly owned by Tesco since 2008, is already a major player in financial services with six million customers of its mortgage, insurance , savings and loan products.
Benny Higgins, CEO of Tesco Bank, says: “In designing our current account we have listened to more than 20,000 customers to understand what they want. And the account we are launching today offers all the features they told us mattered most. There are no gimmicks; – just a simple, rewarding, modern, convenient current account, designed for Tesco customers, by Tesco customers.”
Key Features
- Clubcard points on debit card spend wherever you use your card.
- A mobile banking app
- ‘Contactless’ Visa Debit card that doubles as a Clubcard
- 3% AER variable interest on credit balances up to £3,000
- £5 monthly fee if customers deposit less than £750 per month
