RE: UKNM: Wacky names

[Sam Michel]

At 11:56 17/07/00 +0100, Sarah Clelland wrote:

>As far as I can make out, Intelligent Finance isn't offering anything

>so groundbreaking. Hasn't the banking industry come to a point where

>offering an on-line service is mandatory rather than a risk? Sean & Giles

>are both

>right - starting a brand from scratch must be costing them a fortune and I

>can see no reason to completely and utterly distance themselves from their

>existing

>brand - people will make the connection anyway.


I'm not so sure about this. Go back a year or so and consider Prudential's

public image. I don't have any research to back it up, but I'd guess it

probably came up as a bit of a stiff financial services company that wasn't

terribly exciting. That's a mile away from the image they've managed to

create with Egg.


Re-focusing Prudential to Egg may have adversely affected their steady core

business whilst reducing the flexibility of the parent institution.

Admittedly as they were one of the first on the block to make the move,

they had a lot of advantages the newcomers don't have.


>Frankly, they'd be better off spending the money on ensuring that their

>products are the cheapest, their customer service the most efficient and

>their site the most user-friendly, functional and reliable website on

>offer. The

>fact that the site wasn't ready on time suggests that their priorities are

>somewhat different.


That's certainly true. Given the current state of the banking market, it

looks like you have to give away plenty to gain market share. Great for the

customer but not so good for the bank in the long-term (isn't Egg's share

price on the slide?)...another case of Amazon.com-style buying of market

share with investors money?!


I spotted an article in Sunday Business, which interestingly underlines why

banks seem to favour the whacky-named subsidiary route. It claimed that

Abbey National were looking to sell 20% of Cahoot to a private equity firm

who could bring substantial IT skills to the table. I think the article

mentioned Apax and a couple of others.


Toodle Pip


Sam

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