Royal Bank of Scotland (RBS) has announced that it will be offering "loans within minutes" as part of a £1bn ($1.7bn) investment in its high-street business.
Recently appointed head of personal and business banking Les Matheson said the move was partly aimed at challenging Britain’s payday lenders, the numbers of which are increasing in the country.
Go deeper with GlobalData
RBS – which holds about 8% of the UK mortgage market – is hoping to sell more home loans.
"When you look at why people use payday lenders – because they are simple, easy and fast – in those senses banks need to do a better job. We should be able to find a way to make loans available as quickly – in minutes, rather than hours or days or weeks," he said.
However, Matheson precised that there was no plan to offer the kind of smaller loan sums available from payday firms.
RBS stated that the £1bn package represents twice what the bank would ordinarily have spent, and it will be used to expand digital services such as smartphones functions, upgrading 400 of its branches with iPads and WiFi and improving existing IT systems.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData"We are investing in our branches. We will have fewer but they will have more capability… more well-trained people," explained Matheson.
The bank – which has 6m online banking customers but only 3m users of mobile services – expects to see mobile overtaking online banking in the forthcoming months.
Responding to the decline of traditional banking, Matheson also spoke of plan to close some of the bank’s 1,900 branches. RBS is already selling 314 of them under the W&G brand in order to meet European Union rules.
Matheson stated that regulation was "pushing to make things more complicated" at a moment when he was trying to make banking "simple, easy and fair".
Last week, it was discovered that several UK banks – including Barclays, Lloyds, Halifax, HSBC and RBS – along with payday lender Wonga misbehaved by sending letters to their customers, in which they pretended to be law and debt recovery firms.
At the time, Citizens Advice CEO Gillian Guy said: "It is dishonest of lenders to disguise letters chasing people for money as being from third parties.
"People who are heavily in debt are under immense financial strain and need to know where to go for help, not be harassed by bogus companies exerting undue pressure and in some cases charging them for it."
Although the practice is legal, most banks said they had stopped to send such letters. RBS stated: "Our customers should never be in any doubts about who they are communicating with.
"We will stop the use of any solicitor or debt-collection brand names in correspondence with our customers that could cause confusion."
Related articles:
RBS outlines $1.7bn investment plan to upgrade retail banking operations
UK’s banks send indebted customers letters from fictitious legal firms
RBS plans more branch closures as online banking surge
