1000 branches will be rebranded by the end of the month and Alliance & Leicester will also vanish from our high streets later this year. So what does all this mean for existing customers and what does it mean for the future of banking here in the UK?
Antonio Horta-Osario: Our new approach is based on a very simple premise – the more business customers do with us, the more we will offer them in return.
We are already the bank with the most number of best-buy products of any high-street bank.
CF: So I’ve come to talk to Andy Smith from Santander to ask what all this rebrandings going to mean for customers.
Q1: So Andy, if we start with existing customers - Abbey and Bradford & Bingley - what does today mean, what does this whole rebranding package mean for them?
Andy Smith: Well it’s a difficult one, because it actually means two things. It does mean very little’s going to change, so there’s going to be a new name on top of your bank, so when you walk into your branch it’s going to say Santander rather than Bradford & Bingley or Abbey, but also at the same time you’ll have the same customer service, you’ll have the same products, you’ll have the same staff – so nothing will change instantaneously.
But in the longer term by bringing all the branches together you will have more branches that you can go in and do your business. So if you’re an Abbey customer now you’ve got 700 branches: by the end you’ll have double that. If you’re Bradford & Bingley you’ll have quadruple that.
Q2. And what does it mean for your products that you’ve got? So say you’ve got a Bradford & Bingley savings account, and somebody else has got an Abbey savings account, will any of the terms and conditions or any of the rates change?
AS: We’ve aligned all of the front books, so all of the new business is the same across the piece. So if you’re buying a savings product from us now it’ll be the same whether you’re buying it through what was Bradford & Bingley, what was Abbey and what is currently Alliance & Leicester.
We haven’t made any decisions about what we’re doing with people who have got savings products with us at the moment – if we do make any decisions about aligning that or simplifying it we’ll write to our customers and give them full knowledge of what we will be changing, and give them their options.
Q3. So for the time-being everything continues the same as it was last week?
AS: Yes, exactly.
Q4. And what about Alliance & Leicester, because obviously the rebranding strategy that we’re currently seeing begin to be rolled out is purely Abbey and Bradford & Bingley. When does it extend to Alliance & Leicester?
AS: Alliance & Leicester will be rebranded over the summer of 2010 so should be finished by September.
Q5. And how many branches in total, once it’s all complete?
AS: Once it’s all complete, we will have 1300 branches in the UK.
CF: All Santander?
AS: All Santander, correct.
Q6. And going forward, what do think this is all going to mean for the future of banking here in Britain? Because obviously Santander took over Abbey, Bradford and Bingley and Alliance & Leicester, who actively fought and competed for business; we’ve seen other mergers and acquisitions within the bank and building society sector over the last couple of years and some experts have said that this reduced competition is actually going to be at the detriment of the consumer, because there’s fewer brands fighting for their custom and therefore they don’t have to fight as hard and it could affect the rates that we get?
AS: What would we would say is that Santander is going to be a force for competition in the UK - we’ve done that through the Zero current account and the removal of Spanish ATM charges, we have more best buy products than any other bank in the UK, so we have actively tried to go out there and be a force for competition by offering better value products than our competitors. That will continue throughout 2010 and beyond.
Q7: But do you think that’s then reliant on other banks trying to compete longer term? Do you still see a competitive playing field here in the UK?
AS: Yes, definitely a very competitive playing field. I mean obviously we’ve got Virgin, Metro, Tesco - all new entrants as well who want to get into the banking space. More competition is good for consumers, we’re going to continue to drive our efficiency that we can deliver great value products to our customers.
Q8: You touched on it earlier – you mentioned the Zero current account and the removal of charges – so as part of this rebranding strategy we’ve seen some innovative changes coming through into play. Can you just explain a little bit about the changes to your product offerings you’ve introduced?
AS: Sure. The Zero current account is a no-fee current account, so there’s no fee if you go overdrawn, there’s no fee if you use an ATM abroad and there’s no fees if you have point-of-sale abroad – so if you buy goods in a Spanish shop or a French shop for example.
It is only available for people who currently have mortgages with Santander, so if you had an Abbey mortgage or if you take out a mortgage with Santander today, you can immediately be upgraded to the Zero current account, and you can take it out free of charge.
At the same time we have also wiped ATM charges from our parent bank if you’re in Spain - about 1 in 4 of all of our customers go to Spain and 1 of 4 of our foreign withdrawals are from Spanish ATMs. If you use the Santander one from today, there’ll be no charge from that as well.
Q9: The current account, because it’s only available to mortgage customers, and we’re beginning to see an increasing number of products, not just from Santander but other banks as well, that are only available to existing customers. Is this a change you envisage more of going forward, so that you’re rewarded for being an existing customer?
AS: Yes, I certainly think from Santander’s perspective we will continue to reward people that have placed more business with us. If you have one product with us, great, if you have two products we’ll give you something back for having that with us.
We are very good value across the piece, we do have a number of best buy mortgages, savings products – we obviously have the 6% current account as well so it’s not like we’re not offering very good mortgages in exchange for a great value current account. The mortgages stand up on their own and a number of them are best buy, and we will continue to operate in that way.
Q10: Is that to try and deter people from switching? From jumping from one provider to another?
AS: I think switching is a good thing – I think competition is a good thing! I think purely we’ve looked at how much money we make from the products we sell, and if we sell you two products we can afford to make less money, so we are rewarding loyalty in that way. It’s still not going to stop anyone from switching – we’re avidly keen on not tying people into products so for example our savings book. All of our new savings offerings are always available to existing customers as well as new customers, we’re not saying to people who currently save with us “you can’t have this new 4.1% fixed rate bond” – we’re entirely happy for you to move across to that product.
Q11: So quite an interesting time for the UK high street with regards to banking?
AS: Yes definitely! I think banking should really get back to being boring, because that’s actually what we should all be and we’ve just had a very interesting two years with everything’s that’s gone on and interesting times now with new entrants as well.
CF: Great, thank you for your time Andy.
AS: It’s alright, thank you.