Pru's plan for pounds 25m centre raises stakes in telebank war

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The Independent Online
The battle to dominate the UK's burgeoning market in telebanking grew more ferocious yesterday as three banks announced plans to double the staff they employ to answer calls. As Andrew Verity reports, the telebanking boom will bring thousands of jobs to towns where traditional industry has been devastated.

Prudential, Bank of Scotland and Standard Life all announced plans to double the numbers they employ in telebanking in a bid to capitalise on a boom which has drawn in thousands of new customers every week.

Prudential is to create 1,500 jobs in a brand new call centre in Derby, quadrupling the numbers employed at call centres. Its existing centre in Dudley has already drawn in 115,000 new customers.

An investment of pounds 25m will build a call centre in Pride Park, Derby, which be nearly twice the length of Derby County's football pitch, giving a much-needed shot in the arm for the local economy. Many new staff will be taken on as part of the Government's "New Deal" on jobs for the unemployed.

Mike Harris, chief executive of Prudential Banking, said: "I am confident we can continue to develop employment opportunities in Derby, building on the initial investment of up to 1,500 jobs over the next few years."

Bank of Scotland, which already employs 470 staff, is raising the numbers it employs to 710 in the next few months to cope with mushrooming demand for accounts run in partnership with Sainsbury's.

Standard Life, which opened its new bank just one month ago, is set to boost staff numbers far beyond its original expectations. When the bank was launched in January, it expected to employ just 100 staff to handle calls.

After receiving 65,000 calls in one month, taking pounds 165m in deposits and opening 23,000 new accounts, Standard Life has run out of space for much- needed new staff. Yesterday it confirmed it will buy 114,000 square feet of vacant space next to its head office in Edinburgh and recruit a further 400 staff. The bank hopes to open to business customers within a month. "Business has been phenomenal," said Jim Spowart, managing director of Standard Life Bank.

Halifax is also joining the telebanking bandwagon and plans to sell mortgages and life assurance over the phone later this year. Its call centre in Leeds, which currently employs 500 staff, is likely to expand up to its capacity of 1,300.

The boom in jobs dealing with customers over the phone is not confined to banking. Leisure groups such as EMI are also doing an increasing amount of business over the phone.

According to the Glasgow Development Agency, Scotland alone will see jobs in call centres more than double to 37,000 by the year 2000. With 120 call centres already running across Scotland, the industry has quintupled in the last five years.

While most traditional banks already offer some telebanking services, take-up has been small. But in the last two years, the entry of new players such as Scottish Widows, Tesco, Sainsbury and Standard Life, all offering high rates of interest on accessible deposit accounts, has put them on the back foot.

NatWest is now piloting a high-interest account, offering more than 6 per cent with instant access, but has not publicised it.

Ian McNuff, head of telephony at NatWest, said telephone contact had doubled in the last five years, even for high street banks. "We expect in 1988 to receive some 100 million contacts by phone with the customers. That makes it the fastest growing part of any financial services business.

"The Pru's move simply recognises that customers are now more confident with dealing over the phone."

John McCann, a spokesman for the agency, said: "The growth in the last five to six years has been staggering. From Scotland's perspective, we now have a very well-developed service sector. Since the old industries have gone, there's a whole generation which is now used to seven-day opening, seven-day working, seven-day playing."

Wages for staff at call centres tend to be under pounds 10,000, with higher wages for more complex jobs such as selling insurance. A telesales operator in banking will usually be paid pounds 4.60 an hour - or pounds 9,000 a year.

Employers tend to ask only for a "customer service background" - which can include any retail job.

Midlands accent `will not put customers off'

Prudential's decision to locate in Derby was yesterday seen as a rebuff to many in the industry who insisted customers would be put off by a Midlands accent.

"We researched lots of factors before choosing the site at Derby and one was the regional accent," said a spokesman for the Pru. "It came out very well in the research. It's seen as quite soft and welcoming."

The Pru has also defied a prediction that Midlands call centres would fail. Research by Scottish banks has suggested the Scots accent is seen as clear, well-spoken and friendly.

The West Midlands accent was unfairly perceived by outsiders as indicating stupidity. "There's a very low incidence of call centres in the Midlands," said Mr John McCann, of the Glasgow Development Agency.

But the Pru said its centre in Dudley had seen unprecedented success in attracting callers.