There is a war raging in the UK banking sector. Traditional banks
are under attack from internet banks determined to woo their most
profitable clients. With a European Commission report suggesting our
mainstream banks are the ones most exposed to new competition in Europe,
this trend is not surprising.
First-e is a classic example, launching on 18 September as a pioneering
internet bank. Owned by Banque d’Escompte, its brand positioning
combines interest rate leadership with an aggressive anti-bank stance -
a theme used by other direct banking operations.
First-e has a simple approach - to mock non-internet banks for their
high costs and low returns. This is a consistent theme in its press
advertising, with straplines such as: ’A First-e account pays 6.51 per
cent ... where does that leave your bank - the trashcan?’ Other
advertising stresses that First-e has no bank managers, no branches and
no paperwork.
First-e focused solely on the press for its launch campaign and spent
more than pounds 1.2 million: pounds 258,412 in September, pounds
548,784 in October and pounds 469,444 in November. No TV, radio or
direct mail activity has yet been tracked, although First-e has used
outdoor.
The lead creative (accounting for over half of all press spend) uses the
theme ’Someone had to be first. Why not you?’. The titles used by
First-e comprise: the Daily Mail with 15.1 per cent of all press spend
to date; The Mail on Sunday, 12.5 per cent; The Sunday Times, 11.4 per
cent; Evening Standard, 10.7 per cent; The Daily Telegraph, 10.3 per
cent; The Times, 9.1 per cent; The Independent, 6 per cent; Financial
Times, 5.8 per cent; The Sunday Telegraph, 5.5 per cent; The Observer,
4.9 per cent; The Guardian, 4.1 per cent; The Independent on Sunday, 3.1
per cent; Investor’s Chronicle, 1.2 per cent.
Most of First-e’s ads are full page and it has used 11 executions. The
upmarket selection of publications is not surprising given First-e’s
target market.
Consumers are invited to respond to the ads by visiting www.first-e.com,
which raises brand awareness and points people towards the web.
First-e’s pricing strategy is the same as Egg’s, which is to buy market
share by offering rates well above the base rate in the hope of
attracting and retaining affluent customers. This cherry-picking
approach will be crucial to the success of online banks.
What of the future? New entrants’ lower transaction costs certainly give
them a huge competitive advantage and they seem poised to win over the
very customers the mainstream banks are most keen to retain. However,
the big banks are by no means standing still, with most launching their
own internet banking services.
Research by Media Monitoring Services, tel: 01344-627553
www.mediamonitoring.com
