Question: Where in financial services are you likely to hear the following: ‘Unfortunately it has now come to the stage where our disproportionate market share has continued to grow significantly, and regretfully, we now need to take steps to address this.’
Answer: When a bank, the Co-operative in this case, becomes a refuge for those in financial difficulty.
While the news that the Co-operative has closed its doors to newly bankrupted individuals won’t surprise the banking community, the media seems to have missed the point. Some stories bemoaned the fact that Barclays is now the ‘only option’ for those yet to be discharged from insolvency agreements. Others revelled in a good smear, hammering home the fact that the announcement came from ‘the Co-op, which prides itself on an ethical stance’.
The hard reality for all involved is that the Co-operative, like all other banks with the exception of Barclays, can no longer make a business case to support the continuing provision of free banking services for those recovering from bankruptcy. It is easy to see why: the banks have administrative costs to cover, but very little chance of recovering those costs let alone turn a profit from the customer relationship.
As the banks continue
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