Superbrands case studies: Abbey

Originally published in 'Consumer Superbrands Volume VI', 2004. The book reviews the UK's strongest consumer brands as judged by an independent judging panel.


The retail financial services market has changed rapidly in recent years. The UK financial services sector used to be characterised by a combination of regulatory restrictions and functional demarcation.

In the past two decades, successive governments have continued to deregulate the industry. This has been largely in response to past recessions and to support structural change by improving the efficiency and competitiveness in both the public and private sectors.

In addition to this, technological advances have fuelled competition in almost every sector of the financial services market. Furthermore, banks and building societies have been joined in the UK retail banking and financial services marketplace by a diverse range of new entrants such as internet banks, supermarkets, insurance companies, new credit card providers and consumer finance groups.


Abbey was formed in 1944 following a merger between the London-based Abbey Road Building Society, founded in 1874, and the National Building Society, established in 1849. There was large-scale public demand for housing in post-war Britain, which Abbey helped to meet with the provision of mortgages.

At first, it focused on savings accounts and mortgages, but during the 1960s and 1970s a wider range of financial services were gradually introduced. By 1989, the year Abbey converted to a plc, it had 681 branches nationwide -- a huge leap from 1960 when there were just 60.

Unlike other banks that were actively cutting the number of branches at the time, Abbey continued to increase its number of outlets and in 2002 the bank had over 750 branches.

Abbey's transition to plc status in 1989 was strongly supported by its members. Up to five million voted their approval in a secret ballot. Almost overnight, the total number of private shareholders in the UK rose from six million to nine and a half million. Today, Abbey has just over two million shareholders, a large number of whom have held shares since 1989.

Abbey for Intermediaries was launched in 2002, bringing together under one umbrella Scottish Mutual, Scottish Provident, James Hay, Cater Allen Bank and Abbey National branded mortgage and general insurance through intermediaries.

The September 2003 re-brand from Abbey National to Abbey heralded the start of the next chapter in the company's 150-year history.


Mortgages and savings have always been the backbone of Abbey's business. Research carried out in the months leading up to Abbey's re-launch highlighted that customers had become baffled by the vast array of mortgages and savings accounts available to them. Most simply do not know where to start to find the right solution for their needs. So as part of its business restructure, Abbey set about reclassifying its range of mortgages and savings accounts into three simple strands, clearly demonstrating which mortgages or savings would be right for the customer, depending on their individual needs.

Today, Abbey's mortgages are split into three groups:

'Easy Start' for customers who want the reassurance of reduced payments in the early years (including tracker variable rate mortgages and cash-back mortgages).

'Sure', for people who want the peace of mind of paying the same amount for their mortgage each month (the range therefore includes fixed rates and capped rates).

'Freedom', which offers mortgages which allow customers to keep their options open, including the opportunity for them to vary monthly payments, repay the loan early, take a payment holiday, or use some of their savings to shorten the life of the mortgage. Within this range, Abbey looked to reward both new and existing customers with the launch of its Reward Mortgage in April 2004. The Reward Mortgage provides 1% cashback every two years for the life of the mortgage, without applying any product related charge (i.e. they won't ask for the 'cashback' back).

Similarly, savings accounts have been organised into three groups:

'Easy Reach', which allows the customer to feel totally in control of their money, having access to it when, where and how often they want.

'Lock Away', where the customer leaves an amount of money untouched for a year or more, knowing exactly where they stand.

'Put aside' where the customer commits to putting a sum of money away on a regular basis to earn more interest.

One of Abbey's most recent new developments is the introduction of multimanager investments. Abbey's multi manager offers investors a wide range of funds and access to some of the best global investment talent in one place, so it doesn't rely on a single investment manager for its performance. This is an up-to-date style of fund management that aims to produce good and consistent returns, and is available to everyone.

A new advice framework model is also being developed by Abbey, to make sure that every customer understands exactly which accounts and services are available to them, and so they choose those which suit their needs the best.

Recent developments

Abbey's business and brand restructure has been the most significant development in the company's recent history. New Chief Executive, Luqman Arnold, has developed a new business strategy, focusing purely on UK personal financial services, and has restructured what was a group of diverse organisations into a single company, focused on the customer.

A new approach to business -- encapsulated by the desire to turn banking on its head -- is the core of the re-launched brand.

As part of the restructure, non-core entities were placed into a Portfolio Business Unit (PBU) with the intention of reducing or exiting these businesses with care for the companies' employees who have a vital role to play during the process. Excellent progress has been made with the PBU in the last fifteen months, highlighted by the sale of First National Bank plc to GE Consumer Finance, the consumer credit business of the General Electric Company, for £848 million.


Research carried out prior to the company's relaunch had highlighted that when people talked about Abbey National they referred to the company as 'Abbey'. So relaunching the brand was made part of the wider business-led strategy.

Chief executive Luqman Arnold said: "We relaunched the company because we've got a clear new purpose -- to continually improve the way people relate to their money. For most people, sorting out money is baffling, scary or boring -- or all three. We're going to change that -- and if we do, customers will want to join us and love to stay with us. In fact they won't want to go anywhere else. We want to turn banking on its head -- because banking isn't good enough. Banks talk about customer focus but do what suits them. We're going to be different. We're going to look at everything banks do, and turn it on its head. It's a huge challenge."

The conventional approach to financial services marketing is to try to form a relationship with customers in order to get as much of their money as possible. To achieve ultimate customer-centricity. Abbey's goal was to bring disruption to financial services marketing.

It aimed to achieve this by focusing on improving customers' relationship with money and not just the bank, in order to build trust.

The first stage of this strategy was to disrupt conventional thinking with the message that banks get in the way and that change needs to happen in banking. Having tried to get this message across, it could market its accounts and services, so that customers could understand them. Abbey is doing this by revising the language it uses with customers (and employees), cutting out jargon and adopting a friendly, clear tone.

By working through customers' insecurities about dealing with their money and removing the barriers between customers and their money, Abbey's goal is to position itself as the financial services organisation that cares about finding ways to help customers enjoy their money.

Abbey relaunched its brand in September 2003, following extensive consumer and staff research. The vision is to 'be number one, for number one'.

To communicate its rebranding internally, Abbey set aside 60,000 extra training days to ensure that the new way of communicating with customers became firmly embedded in employees' day-to-day practice. It also hired 600 dedicated customer-services staff in branches and telephone centres to further meet customers' needs.

All internal communication tools have been reviewed and either have been or are in the process of being revised.

Today, Abbey continues to work hard to move away from typical rate-led advertising, which is commonplace in financial services.

In addition to this ongoing marketing programme, Abbey is committed to social responsibility. Its charitable trust works closely with charities and voluntary organisations throughout the UK, as part of the company's Community Investment Programme. It favours projects that support disadvantaged people through education and training, local regeneration projects which encourage cross community partnerships, and financial advice which helps them manage their money.

In 2003, it made a total contribution valued at £2.17 million to the community. Since it was set up in 1990, it has made a total contribution valued at £15 million. Abbey also operates a Matched Donation Scheme for charitable work, which is available to employees.

In line with the rebranding programme, Abbey's website relaunched in mid 2004 with a fresh new look and innovative content. To ensure that the new site reflected what customers felt was important, Abbey talked extensively to its customers and web users to understand what they liked and disliked about the old site. Abbey also wanted to reflect the new brand in the way the site looks, the language used and ultimately in the experience it offers users.

In addition, Abbey's e-banking services underwent significant improvements early in 2004 resulting in easier navigation and enhanced payments and statements functionality.

All of these developments are aimed at helping customers manage their money more easily.

Brand values

With its restructure and brand re-launch, Abbey's core aim was to remove banking's mystique and place itself firmly within the real world of its customers. So the company developed a customer-led strategy, distinguishing itself from other financial services companies, which are predominantly product led. Abbey now strives to provide customer-led solutions that prioritise customer needs and requirements, competing by providing a distinctive, high-quality customer service.

Furthermore, the company is committed to eliminating complex financial jargon, and to communicating with customers in terms they can understand. Abbey's purpose is 'to continually improve the way people relate to their money'.

© 2004 Superbrands Ltd