Revealed in his Labour conference speech, Brown told delegates how he wanted the 11,500 branches to be the centre of the nation’s banking – but is this an innovative way to take power away from the oversized banks or just another clumsy, ill-advised attempt to fix a broken sector?
In his speech on Tuesday, Brown said: “I want the Post Office to play a much bigger role, bringing banking services back to the heart of people’s communities.”
The Post Office currently offers savings accounts, savings bonds, mortgages and credit cards but Brown wants it to increase its proposition and offer all banking services and further affordable products through its 11,500 nationwide branches.
Almost as soon as he had stopped speaking, the Building Societies Association took a swipe at the plan – director general Adrian Coles said the UK already has 52 ‘people’s banks’ in communities across the country, and said making the Post Office a big banking player could be another blow to the already beleaguered building society sector.
He said: “Mr Brown will need to make sure his proposals for the Post Office do not unfairly penalise building societies and undermine their valuable contribution.”
And advisers were equally as unimpressed. Association of Mortgage Intermediaries director Rob Sinclair said if the Post Office wanted to dabble in more complicated banking products it had to be ready to train up its 180,000 staff to financial sector standards. London & Country technical director Richard Morea said the Post Office already offers a wide range of products, including Bristol & West mortgages, and has yet to make a big dent in the financial sector.
This announcement may not have impressed postal staff either – only last year staff told the Daily Mail of an exodus after they were pushed too far to ‘hard sell’ products like savings and currency exchanges.
But then again it may be a necessary strategy – Halifax recently revealed it was to assess the viability of its 300 agency desks in small communities and reports that the EU Competition Commission is ready to shut down a large percentage of the bank’s branches are still widely circulating. Also, the creation of another bank may mean another viable mortgage lender offering competitive products, injecting a bit of life into a moribund market. It could also be a stimulus for the nation to begin saving, a very much needed exercise.
What do you think? Is this an innovative way of keeping the mortgage market alive while improving the nation’s savings balance? Or would this just flood the country with under-qualified direct sales advisers whilst delivering the building society sector its final death blow?