Simon Read: Is loyalty to your bank all it's cracked up to be?

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The Independent Online

Yorkshire building society announced on Monday that it is taking over the Egg brand, as well as all the savings and mortgage customers of the online bank. It's a good move for the Yorkshire and a good move for the remaining customers of Egg who will become part of a mutual (the credit card users were sold off to Barclaycard earlier this year).

But it raises questions about financial brands. Do they mean anything at all? Are the millions of people who remain loyal year after year to their bank or insurer just being foolish? Sure, many don't switch because it's easier not to, but there are also many people who choose to stick with the same financial firm that they may have been with for years, even decades.

Take Egg. It was originally set up by the Prudential in 1998 and aggressively marketed as the UK's first internet-only bank for techno-savvy savers and borrowers. The brand was specifically launched to ride the internet revolution. So what sort of people do you think it attracted?

Those who considered themselves smart and ahead of the curve, maybe? Or were people simply lured in by the online bank's then leading savings rates? It was hugely successful in its time, attracting some 3 million customers. Any who joined then and has remained at Egg must feel a little bemused about what became of their exciting brand.

Prudential, ultimately, didn't want it and neither, as it turned out, did Citigroup, which bought it from the insurer in 2007. To be fair to Citi, whatever hopes it may have had for the brand to be used as leverage to build up a significant UK presence were scuppered by the credit crunch, when the mighty American bank itself had to be bailed out by the US government.

Since then, Citi has been looking to unload Egg; it tried to sell the whole business last year with no success. It sold the credit card part of the firm in March to Barclaycard, which unsurprisingly turned down the opportunity to buy the Egg brand, preferring to transfer customers on to its longer-established brand.

So what now for Egg? The Yorkshire already has a multi-brand strategy keeping the names of the building societies it has taken over in the last couple of years – Barnsley and Chelsea – even though the branches are now effectively Yorkshire branches. It plans to do the same with Norwich & Peterborough, assuming it gets member agreement to take over the society next month.

That strategy makes sense when you're dealing with decades of tradition, but the same is clearly not true of Egg. The society says it is yet to decide whether to keep the brand, but there are some reasonable arguments for doing so.

Even if Yorkshire does decide to scrap Egg, should we mourn it? Do its customers care whether their accounts are run by a building society, a bank or an insurer? That begs the question of why so many of them have remained with Egg when it's a long time since its savings and mortgage accounts were regularly featured in the best-buy tables.

Some stay simply because of inertia. But there must be others who have remained loyal to Egg. Why? The price of their loyalty can easily be calculated. How much extra interest – or how much cheaper a mortgage – could they have got elsewhere? That's a question to ask whether your account is at Egg, or anywhere else. If you work out that loyalty is costing you more than a few pounds, it's time to switch.

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