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| Has Tesco put a nail in face to face banking with their new Tesco current account? |
It was one hell of an opportunity. The kind of rare opening that appears, as if by mysterious design, perhaps once a decade. But, it
pains me to report, Tesco fluffed its lines - and its error will be of detriment to us all.
Last week, the supermarket giant made available its first Tesco current account, noticing, no doubt, that banking is a marvellously lucrative business if you can convince people to hand over their cash.
In a publicity blitz, it unveiled to reporters a 3pc interest rate on balances up to £3,000 - not bad, given today's miserable savings rates - on an account which also
offers a Clubcard point for every £4 spent on card.
offers a Clubcard point for every £4 spent on card.
But amid the fanfare, there was a crushing blow: Tesco decided against installing banking counters next to the grocery aisles in its 3,300 stores. Instead, it will provide just telephone and internet services for the Tesco current account, while allowing deposits to be made in 300 shops.
That cost-conscious decision sounded the death knell for any remaining hope that face-to-face banking in Britain could be saved from inexorable decline. Bank branches have been steadily disappearing from high streets for several decades. HSBC, NatWest, Barclays and Lloyds, all claim it is simply too expensive to keep them running. Between 1989 and 2012, the total branch numbers fell 40pc - a loss of nearly 7,500. This includes 171 shut in a single day by Barclays on April 7, 2000.
It has created a vicious cycle: as towns and villages are left without branches, so the way people manage their money changes. The internet becomes vital for those in remote areas, and with busy city dwellers happier banking on their iPhone than standing in a queue, banks perceive a green light to close outlets.
This is perfectly fine for those comfortable with modern technology. But what of the six million pensioners who have never used the internet? What happens when you need to review your mortgage, or deposit a cheque? What about the small businesses and tradesmen who cannot exist without access to a local bank?
This latent demand for physical, tangible banking should have had Tesco bosses salivating. The company already has the vast infrastructure - its 3,300 stores - needed to run a nationwide branch network. It also has the trusted, recognisable brand required to attract customers - particularly those who remain unconvinced by internet security.
By turning its supermarkets into "Tesco banks", Tesco could have attracted millions of disillusioned customers from Lloyds, HSBC and the rest - and in the process saved the British bank branch from certain doom. But it followed the crowd prematurely into the "digital age" - and, consequently, has missed a gapingly open goal.