The changes include a cut in the monthly fee for premium current accounts for both new and existing customers from £15 to £10 a month, while the price for an account that includes worldwide travel insurance will drop from £20 to £17.50.
Anyone opening an account will also get a £50 M&S gift card, while customers that make it their main bank account will get an additional £50 plus 12 vouchers that offer 20 per cent of shopping both in store and online. That is alongside the an array of vouchers and offers that premium current account holders receive that the retailer claims are worth up to £582 a year.
The move comes ahead of changes next week (16 Monday) that aim to make it simpler and faster to change bank accounts. In a customer survey, M&S Bank found that while a quarter of current account customers have considered switching, just five per cent have in the past 12 months.
The perceived hassle of switching and concerns over moving payments from one account to another are two of the key reasons why customers don’t end up making the move. The new system, brought in by The Payments Council in conjunction with the 17 banking groups that account for the vast majority of Britain’s 46 million current account holders, is aimed at dealing with these issues.
Unsurprisingly, many banks see this as a big opportunity to entice new customers to their offerings. The Halifax is promoting a ‘£100 to switch’ offer, while First Direct has upped its incentive from £100 to £125.
But many in the industry believe it will also be important to retain customers by offering added value. A spokesperson claims this is M&S Bank’s intention, making sure it offers long-term incentives to keep people with its service, rather than aggressively going after new customers.
“This is about what we can do for customers in the longer term. That’s why we’ve changed the price of an account rather than offering lots of short-term incentives.”