The clothing and food chain plans to open 50 in-store banking branches in the UK over the next two years under the new M&S Bank brand. It will add current accounts to the M&S Money branded credit cards, loans and savings products already offered from autumn 2012. M&S Money products will be rebranded M&S Bank later this year.
M&S chief executive Marc Bolland says M&S Bank, which is owned by banking behemoth HSBC but will operate as a profit-sharing joint venture, offers consumers an alternative to the traditional banks.
“M&S is one of the most trusted brands on the UK high street and we’ve achieved this by continually listening and responding to the needs of our 21 million customers,” he adds.
Data from YouGov’s BrandIndex backs Bolland’s claim. M&S Money’s Index score – an average of how customers rate the brand in terms of impression, quality, value, reputation, satisfaction – stood at 1.5 on 8 June against a sector average 0.6. High scores by mutual firms such as Nationwide (7.9) offset negative ratings for banks linked to the financial crisis such as Lloyds TSB (-3.6). The master M&S brand’s index ranking was 53.6 on the 8/6.
M&S is the latest to try and exploit what many claim is a lack of trust in the financial services sector following the 2008 crisis that led to the bail-out of Lloyds Banking Group and RBS. Metro Bank launched in 2010 with a promise to engender “love for your bank” among consumers, while Virgin Money expanded its operations in November with the acquisition of 75 Northern Rock branches.
Industry figures welcomed M&S’s entry into full banking but warned that they face branding challenges.
Anthony Thomson, co-founder and chairman of Metro Bank, which last week announced it has raised £126m to fund new store openings, says retailers extending into banking has not yet proven successful.
“They are not places people have looked to go to solve banking issues. Current accounts are key to the success. It will be interesting to see if people will open them when shopping for clothes. can they get things right around service. “
Neil Saunders, managing director of retail analyst Conlumino, says that M&S’ biggest barrier is reflecting different customer dynamics “Retail customers are not loyal, they are often promiscuous, which is not the case with banks where getting customers to switch is an enormous challenge.”
M&S Money was launched in 1985. It was bought by HSBC in 2004.
Read Mark Ritson on M&S Bank here.