Standard Life set to take on banks with phone account

The competition for bank customers will intensify next year when Standard Life launches a telephone-based account to rival those offered by the high street banks, other insurers and new entrants like the supermarkets and Virgin. Tom Stevenson, Financial Editor, reports.

Standard Life, one of the staunchest defenders of mutuality, is to take on the high street banks by launching a telephone-based banking service next year. The life insurer said yesterday it had applied to the Bank of England for a banking licence, a prerequisite for a company wanting to take deposits.

A spokesman at the Edinburgh-based group said Standard Life was hopeful of receiving the go-ahead from the Bank within the next few weeks and would start taking deposits early next year. It hopes to roll out a full range of services soon afterwards.

Standard Life is Europe's biggest mutual life insurer with more than 4 million policyholders and assets worth more than pounds 57bn. It said yesterday it was in the final stages of applying for its banking licence.

Launching a banking service would not be a carpetbaggers' charter, the group said yesterday. The bank will be a wholly owned subsidiary and opening an account will not confer membership. Anyway, Standard remained committed tomutuality, its spokesman said.

Standard's service will operate from a call centre in Edinburgh. It will run in parallel with a deposit account from the Bank of Scotland where it currently directs funds from maturing policies. Until recently, Standard Life and Bank of Scotland had a close relationship, with the insurer owning 32 per cent of the bank. Last year it raised pounds 678m by placing all but 2.5 per cent of that stake.

Standard Life's decision marks the latest intensification of the competition for deposits, with supermarkets such as Tesco and Sainsbury's able to offer attractive deposit rates because they are not weighed down by the high costs of the branch-based high street banks.

Last year, Prudential, Britain's biggest life insurer, moved into banking and was quickly followed by Scottish Widows and Friends Provident. Richard Branson's Virgin has responded by offering an all-in-one mortgage and banking service.

Standard Life's banking operation will be headed by Jim Spowart, who set up Direct Line's telephone-banking business. He has said the plan is to "clearly beat" the rates offered by Tesco and Sainsbury, who he believes will be unable to maintain their high rates.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral