Online and phone banking giant First Direct, the division of HSBC that introduced "no branch" banking to the UK, has stirred up the banking sector again with its decision to charge some customers £10 a month for running their current accounts.
First Direct – which has been in the vanguard of CRM usage, spearheads the uptake of CRM qualifications and accreditation, and is fielding keynote speakers at the 2007 Customer Management and Strategy Conference – has said the move only affects customers who hold less than £1,500 in their current accounts.
In an interview this week, Chief Executive Chris Pilling said the strategy was to target "dormant accounts", but analysts – and the company’s own estimates – suggest it could affect as many as 175,000–200,000 customers.
The company has long been the "gmail of the banking world", with personal recommendations replacing traditional marketing, so in an economic environment of soaring personal debt, the move may be about creating a perceived badge of status around the company, since the charge is likely to drive away poorer account holders.
However, First Direct also offers customers a means of managing a number of accounts through a single portal, and so the strategy may also be about encouraging people to quit other accounts and consolidate their business with First Direct to avoid punitive charges.