Marks and Spencer (M&S), the London retailer known for selling everything from gourmet food to cashmere sweaters, plans to launch its very own bank inside its flagship store.
The bank, backed by HSBC, will offer savings and checking accounts and will eventually even offer home loans. Over the next two years M&S plans to open 50 banks inside stores throughout the UK. The M&S bank will provide easy access for customers and will be open extended hours. With the launch of a bank M&S will compete directly with major UK banks such as Barclays and Lloyds. The retailer hopes to draw customers who are dissatisfied with big banks, and looking for convenient banking services.
The move isn’t a big leap. M&S already is connected to M&S Money, which is a partnership with HSBC that offers credit cards, savings accounts, and insurance. After the launch of M&S Bank, M&S Money will be rebranded.
Other UK retailers have dabbled in financial services. Tesco, which is a major food retailer not only in the UK but also around the world, has Tesco Personal Finance (known as Tesco Bank). The division offers insurance, credit cards, loans, mortgages, and savings products to some 6.5 million customers. Supermarket operator J. Sainsbury, along with partner Lloyds Banking Group, runs Sainsbury’s Bank. The bank is located within hundreds of Sainsbury markets and has online operations.
Here in the US other retailers such as Wal-Mart and Target may pay attention to M&S’s venture into banking. For years Wal-Mart has been toying with the idea of launching its own bank. The mega-retailer does offer check cashing services through Green Dot. Target has its own re-loadable debit card program and offers its own Target credit card.
Retailers have millions of customers coming through their doors already. Trusted brands may easily draw some of those customers to also bank with them. Meanwhile, banks are struggling to boost their reputations in the wake of the financial crisis. People looking to flee big banks may end up at big retailers instead.
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Image by Elliot Brown. Used under a Creative Commons license.