It has been revealed that the Post Office plans to offer current accounts in the UK. We answer five questions on this new service.
Why has the Post Office decided to start offering current accounts to its customers?
Earlier in the year it was highlighted by a regulator that the market is dominated by few providers – most notably, by Lloyds, RBS, Barclays and HSBC, which make up 75 per cent of the market – resulting in a lack of choice for customers.
The Post Office has decided to enter the market to offer ‘simplicity, transparency and good value for money’, according to its director of financial services, Nick Kennett.
Doesn’t the post office already offer some financial services?
Yes, currently, at its 11,500 branches, the Post Office already offers savings accounts, mortgages and insurance policies in collaboration with the Irish Bank.
What details have the Post Office released about its new current account?
Very little at the moment. However, we do know that the service will be launched with the Irish bank and that is will be rolled out in some stores over the next few weeks, with more offering the service next year.
Kennett did tell the BBC: "We have carried out extensive research into the current account market and the findings tell us that customers want simplicity, transparency and good value for money.”
What are the experts saying?
Experts are very positive about the new current account. Rachel Springall, spokeswoman for financial information service Moneyfacts, speaking to the BBC said: "The Post Office has a good High Street presence, perfect for people who prefer the more personal branch banking. It will be interesting to see whether this account will be as transparent and simple in structure as they suggest.”
While, Kevin Mountford, head of banking at comparison website Moneysupermarket, added: “I expect this account will be very popular."
What other new entrants into the banking sector have there been in the last few years?
Metro Bank launched in 2010 and M&S Bank in 2012 , while Tesco Bank has announced it will launch an account soon. However, according to the Office of Fair Trading, none of these banks are yet in a position to challenge the big four.