New Statesman Scotland
Geography is dead in the online world. The Halifax, which we still have to remind ourselves is no longer a venerable building society based in the West Riding of Yorkshire but a mortgage bank plc, is basing its cyber-future in Edinburgh. The new Internet and telephone bank, Intelligent Finance, or "if.com", will roll out its services in July; 1,200 new jobs are being created, and it claims that it will issue between £20 billion and £25 billion in loans within the first year with a target of 500,000 customers. This might seem mere hype or delusion, but the Halifax's new adventure is being led by Jim Spowart, who was highly successful in creating Standard Life's new banking arm in Edinburgh. Spowart jokes that this time he'll avoid his mistakes.
If.com is one of those new projects that may jolt the conventional banks. Spowart says he has some tricks up his sleeves that will shock the complacency of Scotland's bank managers. His central plan is to build a superstructure of life and pensions policies around each customer against which they can borrow during their lifetime with the Halifax's interests secured by generous life cover. If.com customers will make the bank their primary beneficiary in their wills, but will still have far more left over for their family and other conventional bequests.
Add the minimal paperwork and salary costs of the new e-money world, and you have lifetime contracts that are benign for all sides.
The choice of Edinburgh is interesting. It shows that the commercial funk that supposed the Scottish Parliament would be the first step to independence has evaporated. If the Scottish National Party were to hit a surprise series of wins and claim a mandate to secede, Spowart and his colleagues could simply unplug their computers and head for Halifax.
If the Scottish Parliament were really smart, which it is not, it would come up with some tax concessions to make it a greater magnet for financial services and e-commerce. Geography may be dead, but taxation is always with us.
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