Banking on the Post

Banking and the quality and types of financial services being offered to consumers is continuing to be the hot topic in the media around the globe as world markets and economies experience unprecedented volatility impacting on the everyday lives of all of us. Many Posts have longstanding links with the provision of access to banking facilities, be it for savings accounts or for transactional services to help customers conduct their personal financial matters and pay their bills.

However across Posts there is a wide variation in the banking and financial services portfolios currently being offered or planned.  It’s worth remembering that such banking and financial services all require compliance with a complex range of legislation and will be subject to regulation according to what is being offered, where, how and by/ to whom.

In our newsletters we aim keep you up to date with changes, improvements and emerging new developments as they happen, and examples linked to banking and financial services feature continuously, given postal operator commitments to continuous improvement in the provision of services to customers.

Just this month sees details of plans for expansion and development of full Post Office banking operations in India.  Subject to the approval of the Reserve Bank of India the current savings account operations will be enhanced and provide accessible banking services throughout the country, building on and from the existing successful Post Office infrastructure.

Japan Post Bank announced that it is aiming to expand its operations and offer products such as loans.

In Ireland, An Post’s Post Offices are benefitting from the closure by Allied Irish Bank of its own branches.  As part of its business restructuring, Allied Irish Bank has reached a deal with An Post that will see its banking services provided throughout the State’s 1,100 post offices.

In this highly dynamic market the focus is inevitably on the future; to stay at the leading edge with little time to reflect on our history and consider how some of the challenges and opportunities being faced today came about.  In fact I wondered if a few minutes of refection may remind us of how the legacy from Posts past and present has provided and indeed continues to provide customers with a particularly trusted route to access and “bank” on the Post.

Let’s start with the most important factor, in other words, the customer and what they and in fact we all want and need.

Over the past few years we have seen and continue to experience a number of highly publicised banking scandals, economic collapse, requirements for subsidies, resulting in cuts in public expenditure and often real loss of customer’s money. There are very real questions and concerns about transparency of banking systems and the integrity of fund managers and banking executives’ actions.

What was thought to be reliable, safe or reasonable has all proven to be at risk.

It’s hardly surprising that the trust and confidence of consumers in those who manage their money and provide them with banking services to support trade and everyday life is at an all-time low.

Although such worries may seem distant and irrelevant to some, most of us need a place to keep our savings and need to know that our money is safe and sound. In fact it is possible to see and track a direct relationship and impact between banking and finance and the ability for recovery and future sustainable development of communities.

Whether considering the consequences of actions undertaken by key senior executives, the behaviours of major organisations on world markets, or looking at the availability and universal access throughout local communities to simple banking services all these factors impact on the macro and micro economies around the globe and everyone.

All these factors have driven changes in customer behaviour. As money fears grow, we see people withdrawing their savings from traditional banks and placing it with those alternative banking institutions and bodies that offer:

• less risk
• greater guarantee s about security of investment
• commitment to ethical trading.

In many cases this trend continues to benefit those Posts with direct banking connections or partnerships arrangements.

For example, back in 2007 onwards after the world financial crisis emerged, South Africa Post, New Zealand Post and Post Office Ltd were amongst those who mentioned particularly significant positive growth trends linked to  their banking and financial products and services.

This was a good demonstration of trust people had in Posts. It made the postal banks particularly attractive as a reliable institution and operating under a recognised brand where people could place their savings and carry out other financial activities with confidence.

The integrity, trust and diversity of options being offered made the postal bank grow, bucking a trend seen in the commercial banking sector generally.

This migration to Posts has continued to grow at pace, and we see the developments within Posts building and learning from the customer feedback and experiences of the banks, as they develop and offer their services in a competitive market place.

Posts well understand that they are frequently building on an enduring legacy of customer relationships. They may benefit from the values and integrity developed whilst delivering longstanding public service performance and reinforcing trust and confidence that provides a sound platform for on-going development and success in banking and financial services.

You will recall though the earlier point about the differing portfolios and models which operate in the delivery of banking and financial services via Posts, so this isn’t always about a relationship between a Post and its customer, it can be much more complicated with multiple stakeholder interests to reconcile and satisfy.

Take for example Post Office® in the UK:

Post Office Ltd. (POL) is the retail post office company (formerly part of Royal Mail Holdings) providing products including banking to the public through its nationwide network of over 11.800 branches.

Post Office® offers personal banking services to the public on behalf of a number of institutions. The services available differ according to the specific agreements with each of the individual partner institutions. Some business banking services are available.

Finance Products branded as Post Office® (frequently denote where POL is acting as a representative of for example Bank of Ireland).

All the financial papers are recording trends of customers exercising their right to choose and leaving the major international banking brands in favour of the institutions such as co-operatives, mutuals and building societies.

For completeness we must mention that some Posts either have no legacy related to provision of banking services or may indeed have chosen to separate from their banking connection and concentrate on mail services as a core business.

Take for example USPS. Being completely owned by the US government, it is for now strictly prohibited from offering any products or services that are not post or mail related, although looking ahead that may change.

Wherever you are in the world, when reading this as an expert on postal channel access, you will have an understanding of the backdrop on what and how the economic climate, stakeholders, ownership, legislation and customer needs related to banking and financial services  may be developing or not in your locality

This is such a huge topic our research team would always be pleased to hear from you about specific challenges or successes you may be experiencing, as that may enable us to seek out and share good practise or seek opinion from peers.

It is clear that in certain countries the connection between Posts and banking is very alive and thriving while in others it may be non existent, whether out of choice or obligations, but caused by the turmoil and lack of trust in proper banking institutions postal banks have offered the general public a very stable and safe alternative.

We set out by entitling this piece “banking on the post” as it seems well  evidenced  that in many parts of the world customers are increasingly turning from commercial banks to institutions closely partnered with or part of  Posts, to provide them with reliable and accessible high quality products and services to meet their needs.

Posts have a long history of delivering to people offering services dependably when the economic climate is so volatile it’s hard to know who and what to rely on and trust.

As such postal organisations have an an inbuilt advantage and expectation which translates across their brands through all of their business hence its easy to why people are turning to “bank on the post”