Postman Pat won’t be just delivering parcels in the near future as the Post Office in the U.K. has announced that in the next few weeks it will roll out a new checking account which will rival those offered at leading financial institutions.
Sponsored by the Bank of Ireland, the new account will take advantage of the Post Office’s broad footprint (11,500 branches) and the fact that three million people already use the Post Office for financial services ranging from savings accounts to mortgages.
“We’ve carried out extensive research into the current account market and the findings tell us that customers want simplicity, transparency and good value for money. With over 11,500 branches, which is more than all the UK banks combined, we can provide this through the most convenient and accessible retail network in the UK,” says Nick Kennett, director of financial services at the Post Office.
According to the Post Office, plans to introduce the checking account have been discussed since 2008 but recently the government has made its plans known to increased competition among the ‘big four’ (Lloyds, RBS, Barclays and HSBC) which together hold 75% of the market. In addition, consumer anger at the high street banks has never be higher, making the present the perfect time to launch the new account.
Although the Post Office will not be the only new entrant trying to make waves in the banking segment, Virgin Money (as well as retail giants Tesco and Marks & Spencer) have all implemented or plan to implement similar checking account schemes; it does have the advantage in size and reputation.
The latest announcement by the Post Office further reinforces that the U.K. payments are at crossroads with the government and fellow competitors aiming to shake things up and improve the customer financial product and service experience. While the established players may not look forward to changes, the increased competition should make watching the U.K. payments landscape far more interesting.