Money and Media - Communications, Connections, Comments

Interesting day at the Office

News emerged over the weekend that the Post Office is extending its pilot scheme in the current account market.

The Telegraph claimed the developments as an exclusive and the Financial Times, amongst several other money media outlets, also ran a story on the subject.

Both items were follow-ups from a story which first appeared in May 2013. Last Spring, the PO launched a pilot scheme offering three new current accounts that it called Standard, Packaged and Control. Each account could be taken out through 29 of its branches in East Anglia.

The latest developments from the weekend explained how the initiative has now been rolled out to another 81 branches (making 110 in total) this time located in the East Midlands and the East of England.

Judging by the coverage I’ve read, reception to the scheme from around the media thus far has been generally positive.

The accounts, run in partnership with the Bank of Ireland, are aimed at a diverse range of customers. For example, the Control option is aimed at people who are on lower incomes and/or have previously been caught out by exorbitant bank charges.

Extra choice for bank customers is regarded as a good thing. The rise of “challenger banks” was documented extensively around the money sections last year and it’s unlikely to be a subject which will disappear any time soon during 2014.

All well and good. However, to my mind, a key element to this latest story – one on which the media has not focused very extensively thus far – is the pace with which the PO’s initiative is being rolled out.

Six months on from the original launch and the 110 PO branches that now offer the new current accounts represent about 1pc of the company’s overall network of 11,500 branches.

At this rate it would be another 50 years before the products appeared across the entire PO branch network. In fact, it’s unlikely that the PO would want to make its current accounts available in all its branches but you take the point.

Clearly, there’s little point rushing a project of this nature if doing so means potentially jeopardising its long-term success. Balanced against this must be a risk of allowing a scheme to take too long to achieve nationwide market penetration while rivals nip in and steal a march in the interim.

Perhaps the PO has a cunning plan to increase significantly its number of participating branches around the UK over the months ahead. It’s already possible to register an interest online in taking out an account even if you don’t live in one of the existing roll-out areas.

The company’s head of current accounts, John Willcock, says the take-up of accounts from customers in East Anglia has been “really positive” and “in line with our expectations”. To that end, I’ve asked the PO if it has a year-end figure it would like to reach for 2014. I’ll report back if I receive a response.