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Market
A wave of demutualisation and significant merger and acquisition activity between 1997 and 2001 resulted in consolidation within the retail banking market and the creation of the 'big four', namely, Lloyds TSB, RBS/NatWest, and HSBC. This, subsequently, became the 'big five' at the end of 2001, with the merger of Halifax and Bank of Scotland to form HBOS.
The current account market has been characterised over the past two years by an increase in competition and a move towards a more rate-driven environment. New entrants and the former building societies have endeavoured to wrestle share away from the dominant established high-street banks.
The big five's market share of the current account market now stands at around 80%, according to Mintel consumer research data of which Barclays takes around 18%.
There were in the region of 71 million current accounts in the UK in 2003. This represents an increase of 2% on the previous year and growth of 23%, or the equivalent of more than 13.4 million additional accounts, since 1997.
The rise in the number of accounts has been largely driven by the increasing propensity for consumers to hold two or even three current accounts. Many consumers will now have their traditional account together with an internet based account, using one for day-to-day transactions and the other for convenience to take advantage of higher interest rates. Couples will often have a joint account as well as keeping their own individual accounts.
With 71 million current accounts and approximately 48 million adults in the UK, this equates to an average number of accounts per person in the region of 1.5. Achievements Barclays personal banking division combines Barclays and Woolwich and provides a range of products and services to their sixteen million personal customers in the UK. Together, they operate nearly 2,100 branches, 3,890 ATMs and have more than four million customers registered online. Barclays is one of the world's top-five internet banks and, with Barclaycard, has the leading credit-card operation in Europe.
In August 2003, Barclays announced a 12% rise in profits for the first half of the year. Pre-tax profits at the bank rose to £1.96 billion for the six months to June 30th 2003, compared with profits of £1.76 billion for the same period in 2002. Income also rose by 5% to £5.9 billion as higher earnings in loans and credit cards improved the bottom line. Barclays is one of the private sector's top ten performing organisations in terms of race diversity according to a benchmarking report by Race for Opportunity.
The bank is also in the top ten UK companies that are setting standards on disability according to the Global Inclusion Benchmark, piloted last year by the Employers' Forum on Disability. In December 2003, Barclays won the prestigious Age Positive at Work Award from Personnel Today magazine and Age Positive for its commitment to age diversity; in fact the company now employs more over-55s than under-20s.
History
Barclays origins can be traced back to a modest business founded more than 300 years ago in the heart of London's financial district. In the late seventeenth century, the streets of the City of London may not have been paved with gold, but they were filled with goldsmithbankers.
They provided monarchs and merchants with the money they needed to fund their ventures around the world. One such business was founded by John Freame and his partner Thomas Gould in Lombard Street in 1690. The name Barclay became associated with the company in 1736, when James Barclay - who had married John Freame's daughter - became a partner. Private banking businesses were commonplace in the eighteenth century, keeping their clients' gold deposits secure and lending to credit-worthy merchants. In 1896, 20 of them formed a new joint-stock bank.
The leading partners of the new bank, which was named Barclay and Company, were already connected by a web of family, business and religious relationships. The company became known as the Quaker Bank, because this was the religion of the founding families. The new bank had 182 branches, mainly in the East and South East, and deposits of £26 million - a substantial sum of money in those days. It expanded its branch network rapidly by taking over other banks, including Bolithos in the South West in 1905 and United Counties Bank in the Midlands in 1916.
In 1918 the company amalgamated with the London, Provinccial and South Western Bank to become one of the UK's 'big five' banks. By 1926 the bank had 1,837 outlets. Barclays acquired Martins Bank in 1969, the largest UK bank to have its head office outside London. And in 2000 it took over The Woolwich, a leading mortgage bank and former building society founded in 1847.
The development of today's global business began in earnest in 1925, with the merger of three banks - the Colonial Bank, the Anglo Egyptian Bank and the National Bank of South Africa to form Barclays International Operations. This added business in much of Africa, the Middle East and the West Indies.Today, Barclays operates in more than 60 countries worldwide.
Product
The current account product has been a fairly conservative area with a few companies dominating the retail banking market. But as competition has intensified, providers have looked to new features and strategies by which to retain or acquire customers.
In addition to current accounts, services offered by Barclays include Openplan, Additions, savings accounts, mortgages, personal loans and general insurance products. In the mid-1990s it led the charge into the packaged, or fee-based, account market with the launch of Additions, which is designed to offer more choice and encourage loyalty among account holders.
The account offers benefits such as preferential overdraft rates, higher credit interest rates, free travel insurance, purchase protection and discounts on cross-sold personal loans, insurance and mortgages.
Three years ago Barclays further strengthened its product offering by forming a strategic alliance with Legal & General to sell life, pensions and investment products through its UK network.
Recent Developments
Barclays latest offering, Openplan, is now the biggest integrated banking service in the UK, with in the region of 1.8 million customers through both Barclays and Woolwich. An extra 0.4 million people have signed up since the launch under the Barclays brand in December 2002 on the back of its Fluent in Finance advertising campaign. The service links together a customer's current account, savings and mortgage in order to maximise the benefits and minimise the costs.
In 2002, Barclays began running around 350 Start-Right Seminars each year for people thinking about starting their own business. These supplement the Kick-Start seminars that Barclays runs to ensure that new businesses get off on the right foot and have access to free advice.
Promotion
Barclays has embarked on an advertising approach that challenges the way that banks present themselves. The national campaign was deliberately thought-provoking; concentrating on what bank customers focus on most: money.
The ads, created by agency Bartle Bogle Hegarty, directed by top director Ridley Scott and starring Hollywood superstar Samuel L Jackson, revealed that people talk about money in many different ways -- and Barclays understands them all because it is 'Fluent in Finance'.
After research revealed that UK consumers are highly advertising-literate, as well as sophisticated about their banking needs, Barclays deliberately adopted a thought-provoking, rather than hand-holding, approach. It recognises that customers want to talk to a bank that knows what it is doing and has the ability to 'make things happen'.
The second phase of the Fluent in Finance advertising campaign was launched in April 2003, demonstrating how Barclays money expertise brings value to customers. The campaign builds on the success of the first, and also stars Samuel L Jackson. It is fully integrated, comprising TV, press, and promotions.
It encompasses the range of Barclays offerings in savings and investments, business banking and consumer banking. The new campaign builds on the theme launched last year - that Barclays is expert at the management of money. In one of the most recent elements of the campaign, Barclays unveiled the UK's largest-ever station advertising installation at Bank tube station. The installation, which takes the form of an evolving educational exhibition exploring themes and thoughts to do with money, was scheduled to last until June 2004.
Occupying 75% of the advertising space in the station, the exhibition is initially comprised of famous quotes about money - from people such as Henry Ford, Spike Milligan and George Bernard Shaw - thus providing a history of money and interesting money stories and facts.
Barclays also builds its brand through sponsorship. In 2002 the company entered into a five-year agreement for the title sponsorship of The Barclays Scottish Open, played at the prestigious Loch Lomond Golf Club in the west of Scotland. The tournament is televised by the BBC and has a potential worldwide audience reach of 400 million homes, with a total broadcasting time in excess of 500 hours.
Brand Values
The Barclays brand is built upon the breadth of its operations across many continents, servicing 20 million customers, and in the depth of its involvement with these customers. Its experience, built up over 300 years, enables it to make the complex seem simple. This breadth and depth of experience, and the benefits it offers through being the banking sector's leading money expert is key to its 'Fluent in Finance' brand positioning.
Also central to the Barclays brand is the company's aspiration to be one of the most admired financial services organisations in the world, recognised as an innovative, customer focused company that delivers world-class products and services, ensuring excellent careers for its staff and contributing positively to the community.
Things you didn't know
Barclays was the first bank to launch internet banking in June 1998. It now has around five million online customers. Barclays was the only bank to offer its customers a choice between cheaper banking and a credit interest rate after the Competition Commission Inquiry into UK banking practices.
Barclays helped to finance the pioneering Stockton & Darlington Railway, which opened in 1825.
They also helped finance other early public utility projects, including the nineteenspan wooden Battersea Bridge (1771-2), the Leeds-Liverpool Canal (1770-7) and Regents Canal (1812-20) in London.
(c) 2004 Superbrands Ltd
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