Standard Life launches telephone banking arm
Thursday 18 December 1997
Jim Spowart, managing director of the new Standard Life Bank, yesterday appealed to customers not to inquire until the bank goes fully live on 5 January, when it will offer a telephone-based savings account with an interest rate of 6.76 per cent.
He said the bank had learned from the experience of Tesco and its partner the Royal Bank of Scotland, which a year ago struggled to cope with a deluge of new customers hungry for its savings rate of 6.7 per cent.
The bank, which has hired 70 staff to handle inquiries, is counting on receiving roughly 3,500 calls a day. Mr Spowart said all inquires were being dealt with but asked customers to note the date.
Standard, previously been seen as an ultra-cautious company, will now compete with telebankers such as Virgin, Direct Line, Sainsbury, Prudential, Scottish Widows and most high street banks.
Jim Stretton, chief executive of Standard Life, denied that the move into banking was a risky diversification. He said: "If we do something new, we do it because we think it is really important. If we had not done this, we would have been missing a golden opportunity."
Mr Spowart said Standard's 3.5 million customers were being paid pounds 1.5bn a year and left with no choice but to leave it with a bank paying little interest. "Some banks would give their left arm for that kind of deposit activity," he said.
Of pounds 508bn savings in the UK, pounds 319bn is left on deposit with traditional high-street banks. Yet traditional banks pay interest to savers of less than 4 per cent. Expensive branch networks, and shareholders' demands for dividends, require them to take a much larger cut of the money earned when they invest deposited cash. "We are determined that this new bank will offer personal and business users highly competitive interest rates," Mr Spowart said.
He said the high rates were far from being a short-term marketing ploy. They were sustainable because of low costs. The group has no expensive branch network as its products are sold by independent financial advisers. Advertising costs are low because the bank's new money will come mainly from payouts to existing customers.
The bank believes it will get up to pounds 4bn in new accounts by the year 2000. It will also begin to offer mortgages and personal loans by the middle of next year.
- 1 What happens to your body when you give up sugar?
- 2 Ed Miliband less influential than One Direction's Louis Tomlinson by official Doncaster power list
- 3 Japanese island overrun with cats after population explodes
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
California teacher appears to have hanged herself in her classroom
The City of the Monkey God: Archaeologists claim to have found city lost for 1,000 years in remote Honduran jungle
Ed Miliband less influential than One Direction's Louis Tomlinson by official Doncaster power list
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...