Thursday, 27 June 2013

Marks And Spencer's Offer An Alternative Way of Banking - But Is It Really Better?

Marks and Spencer are set to launch 50 bank branches by the end of 2013 complete with flowers, handbag hooks and more personal touches in an attempt to offer an alternative experience to disgruntled customers of traditional banks.

The M&S branches have been launched in stores across the UK and offer customers access to M&S Money products including Travel Money, Current Accounts, Credit Cards and Loans. The branches operate a pager service allowing customers to continue shopping instore instead of queueing. 

Interestingly the move is backed and owned by banking provider HSBC, so you have to question whether this is really a fresh new alternative way to bank or simply a wolf in sheep's (or M&S) clothing? HSBC already own M&S Money and profits are shared equally between the two firms.

Consumer confidence in the main banking providers is at an all time low. M&S have seen a steady rise in the number of customers switching to their current accounts following recent banking scandals in the media. The Metro, Nationwide and Co-operative Bank have also reported a healthy increase in new customers switching accounts due to an ever increasing mistrust of the big banks. 

Because M&S bank is backed by HSBC we wanted to investigate how good a deal customers are really getting...... We compared a number of products offered by each company and found that customers generally got a better interest rate with M&S. For example an M&S personal loan of £7,000-£15,000 has a 5.4% APR (representative) for new customers and 5% APR representative for existing customers. HSBC offer 5.9% APR (representative) on the loans within the same value range.

Likewise with credit cards M&S offered the a more competitive interest rate of 16.9% APR (representative)   variable whilst HSBC offer 17.9% APR (representative) variable. 

HSBC offer better online travel money exchange rates than Marks and Spencer. Many may find this surprising as we regularly spot comments on Twitter suggesting the opposite!! At the time of writing this article HSBC were offering a Euro rate of 1.1450 and a US Dollar exchange rate of 1.4994 whilst Marks and Spencer offered a Euro rate of 1.1267 and a US Dollar rate of 1.4908. 

It was difficult to compare bank accounts because the incentives differ enormously between the two providers and determining which current account is best is entirely dependent on an individuals lifestyle and shopping habits.

We would always recommend shopping around to find the best deal when purchasing any financial product. 

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