Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point

In Depth

On Air

Low Graphics

Monday, October 4, 1999 Published at 18:46 GMT 19:46 UK

Business: The Company File

Banks squeeze out unprofitable customers

Banks want to shut the door to poorer customers

UK banks are getting rid of customers who do not make them money, according to a banking industry survey seen by the BBC.

The survey reveals that more than half of senior bankers admit to having strategies in place which are aimed at 'firing' unprofitable customers. The process is called 'de-selection'.

And a leaked report shows the government is against bringing in laws to stop this exclusion.

Financial exclusion under fire

The banking sector is currently facing criticism for refusing to take on poorer families.

[ image: The government is against laws to stop financial exclusion]
The government is against laws to stop financial exclusion
Even though the Treasury has promised to tackle financial exclusion BBC One's Panorama programme has discovered it recommends in its Access to Financial Services report that the idea of forcing banks to provide current accounts for unprofitable customers is 'weak'.

The report goes on to say that banks' selection of which section of the market they should service should be left to their own commercial judgement. The report was due out this week but has been held back from publication.

Getting rid of customers

Up to 3.5 million people in Britain do not have a bank account and high street banks are shutting down branches across the country. Roughly 4000 have closed since 1990.

The internal banking survey from the Chartered Institute of Banking reveals that 56% of senior bankers are looking at methods of getting rid of unprofitable customers.

Banking expert Dr. Anthony Gandy explains how banks "fire" customers.

"Simple techniques may be to close down certain types of accounts and offer certain different products to certain different customers. Maybe offering some customers products which aren't competitive. Maybe they'll move to a different institution."

Frivolous fruits

To work out how to target people for financial services the banks like to label their customers.

[ image:
"Cherries" are choice pickings for banks
Panorama discovered one of the most popular systems has everyone categorised as a type of fruit. At the top of the tree are plums - which are classified as 'college educated married men aged 44-65 living in the south of England with an income of at least £17,000 and high savings.

Choice pickings in financial terms are also the "cherries" - aged 35-54 married with a family, they earn above £17,500, usually live in the south, own their own home and have two cars. Other customers are classified as pears, apples, oranges, dates, grapes and lemons.

Although the labels appear frivolous banks take them very seriously. Marketing and database consultant Julian Berry who invented the system said: "Fifty million customer accounts in the UK have a fruits code put on them by one of the major financial institutions."

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Company File Contents

Relevant Stories

04 Oct 99 | Panorama
Seeing Red

28 Sep 99 | The Company File
Banks take a bashing

Internet Links

British Banking Association

HM Treasury

The BBC is not responsible for the content of external internet sites.

In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles