Cooperative Bank Case

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Case 2 ─ The Co-operative Bank Founded in 1872, the Co-operative Bank or Co-op Bank, for short, was a full service clearing bank with a national network of 100 branches. These branches shared an ATM network, award-winning telephone and internet banking and was the first UK bank to offer free current accounts, as well as the first to launch internet banking. The Co-op Bank enjoyed anywhere from one to four percent market share and was known as an innovative niche player. The Co-op Bank was a part of the Co-operative Group, the world’s largest co-operative society, along with food, travel, insurance, and legal services. As of 2007 there were over 3 million economically active members, which made it the UK’s largest co-operative. The same year there was turnover of £9.4billion and 87,000 employees providing service to over 10 million customers a week. Their reputation as an innovative niche player showed steady but measured growth through their: longer opening hours, free banking Current Accounts, Free for life Credit Cards, Interest on Current Accounts, Fixed Rate Credit Cards, Internet Banking “smile” and their Green Flexible Mortgage. Additionally, in 1992 the Co-op Bank was the world’s first bank to introduce a customer led Ethical Policy, giving customers the opportunity to choose a bank that does not engage with unethical companies/organizations. Jumping back to 1988, new changes had to be faced by the Managing Director, Terry Thomas. He had “successfully managed the transition from an almost total reliance on the co-operative movement to a viable, broad-based retail clearing bank” and now the UK was entering into a period of radical change and restructuring. Government regulations regarding financial institutions were blurring industry boundaries, and customer expectations and behaviour were also changing. Thomas had to re-think the operating

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