Having blogged yesterday about RBS, NatWest new mini banks and my worries about which bank customer’s will belong to when banks are split, I found myself in the lift with Alastair Darling at GMTV this morning. So, much to the consternation of his press officer, I said “excuse me” and put these worries to him.
The main concern is that when these new banks are split out of the existing ones, who will go with the new banks? Provisional expectations are TSB and Cheltenham & Gloucester to be split out of the Lloyds group, part of Northern Rock to be sold off, and Williams & Glyn to come from RBS.
Take the example of once-prominent North West-based bank chain Williams & Glynn, which merged with RBS over 20 years ago – will its old customers be automatically demarked to go to the new bank?
His answer was simple:
“You can’t compel a customer to move bank. We’ll be doing this first with the new bit of Northern Rock; we’ll be writing to customers and giving them a choice about what happens.”
The same principle also applies to the potential splits from the other banks.
When I asked whether for a customer with a portfolio of products with a bank, let’s say they have a mortgage, a credit card and a bank account – would it apply by product or customer, his answer thankfully was:
“it’s by product, so if someone had savings and borrowings they would get two letters giving them a choice of what to do with each.”
I pointed out that there had been little message out there on this, and perhaps understandably he said:
“that’s because the announcement’s only just been made”
Which of course is true – it was only thirty minutes old at the time. However it’s been widely flagged in the media, and the crucial issue of what’ll happen to customers was quiet.
Sadly the lift journey ended before I got full clarification of exactly which customers would be written to; would it be all customers, or just those who were former incumbents of the bank (more intergral to the Lloyds & RBS situation than Northern Rock)? Still, I’ll get on the phone to the treasury for that info later (update note tue pm – it has now confirmed to us that it is customers in affected branches who will get the choice)
Having said that, the answer so far is broadly as good as we can expect; giving customers choice. In these mammoth banking machinations we need be very careful not to play with customers as if they were just pawns in a giant game – sold off to satisfy the whims of EU regulation and recoup spent funds.