Banks go pick 'n' mix

Franchised 'free houses' could replace high-street branches

LLOYDS BANK'S black horse, Barclays' eagle and NatWest's broken triangle could all be hanging outside the same buildings on Britain's high streets within a decade, according to industry observers.

A system of "free houses" - patterned on pubs that can sell beer from any brewer - will replace the existing tied distribution network, predicts Steve Webb, divisional director of banking at Hoskyns, the UK arm of Cap Gemini Sogeti, Europe's largest computer services group.

If he is right, it would be the most sweeping change in the retail end of the business since the advent of hole-in-the-wall cash machines in the 1970s. Hoskyns is already developing computer software to enable clearing banks, pension funds and specialist mortgage lenders to work closely in the same premises.

Pressures on banks to reduce costs have already led to branch closures. "The additional investment required for new distribution channels (such as interactive cable television) will make the cost of maintaining branch networks unbearable," said Mr Webb.

"The only economic way for financial institutions to meet the demand on the high street will be by sharing branch facilities. In the next 10 years, we will see the emergence of 'free house' branches, most likely in prime retail locations alongside the major high-street stores."

Customers would get basic services, such as cheque cashing, from a shared counter. But if they wanted to buy more complex financial products, such as a mortgage, annuity or insurance, they would be offered a choice of suppliers, each with a representative on hand to guide them through the small print.

The first steps are already under way as institutions test-market their products through retail outlets owned by third parties, such as the movement of post office counters into independent shops and NatWest's pilot project with Thomas Cook to sell each other's products.

"They will be one-stop financial service centres in which a variety of institutions set out their stalls, just as competing fashion companies take franchises side-by-side in department stores," said Mr Webb. The institutions might try to insist on exclusive agreements at first, but faced with the marketing power of a Marks and Spencer or Sainsbury, they would have little choice but to compete head-to-head with rivals across the aisle.

While the institutions would save money on overheads, customers would save on time spent trudging from branch to branch shopping around for the product that suits them best.

Mr Webb has even more radical views on the future of financial institutions. Once they have become used to working together in shared branches, the banks, pension funds and insurers, as well as the companies owning the free houses, could find themselves forming "virtual corporations", he said.

These would be like joint ventures between several partners, but they would be controlled by a board made up of representatives from each linked by computers and telecommunications. A big advantage such a grouping would have would be the ability to share information about customers.

"Once the different partners involved have become comfortable with each other, the primary partner, for example, could appoint the chief executive, the computer services partner could appoint the information technology director, the distribution partner could appoint the marketing director and the high-street franchiser could appoint the brand operations director," said Mr Webb.

PROMOTED VIDEO
News
video
Life and Style
tech
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Research Analyst - Recruitment Resourcer

£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

Senior Analyst - Financial Modelling

competitive: Progressive Recruitment: This really is a fantastic chance to joi...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform