Pat Robertson Turns To Banking
It seems that America's ever-smiling television evangelist Pat Robertson has taken a shine to Britain - and not for the legion church-going faithful, either.
Just two months after Robertson joined the board of ailing clothing retailer Laura Ashley, it emerges that Robertson is now going to try his hand at banking, too.
Doing what he apparently does best - making direct contact with his public - the evangelist and former U.S. presidential candidate has teamed up with the Bank of Scotland to launch a new "direct bank" in the United States. Direct banking is done one-to-one over the telephone and doesn't use branches.
"The objective is to provide the American consumer with a bank that is committed to service and value," Robertson said. "It is a very nice coincidence that my forebears left Scotland in 1695, the year in which Bank of Scotland was founded."
From the Bank of Scotland perspective, it's also rather nice that Robertson has such a big and faithful TV following in the U.S. - indeed, some 50 million followers. On top of that, he's got business savvy.
"He's a big entrepreneur, and the fact that he has a degree of a following in terms of his ideas [helps]," a Bank of Scotland spokesman said. Ideas? "He's got 50 million-odd people on cable," the spokesman added.
It's that following that could make all the difference to the new venture's success. Ed Furash, chairman of Monument Financial Group, a financial services merchant bank based in Virginia, said any newcomers in the banking market now face ferocious competition, unless they come equipped with a captive audience.
And certainly it's already been proved that religion and consumer capital can mix successfully. Just take the Lutheran Brotherhood, a not-for-profit fraternal benefit society that runs a mutual fund. It's been so successful that on Monday it launched a retail bank.
"There's been a big increase in direct sales and financial products. The only time it's been accepted is when [the bank] offers separate brand names, offers better technology and a lower price, or when someone has a captive audience," Furash said.
Starting in June, the new bank - which has yet to be named - will begin offering Robertson's viewers deposits, then credit cards and eventually loans including mortgages. The Bank of Scotland has already made a success of direct banking in Britain. In 1997, it hooked up with J Sainsbury Plc to offer banking services in the supermarket chain.
The strategy has worked particularly well in Britain, where for a long time there's been a notable lack of choice for consumers, comparatively poor service and a weak distribution system.
Those like the Bank of Scotland have been drawn to the big cost savings that can be had by getting into direct banking, operated by telephone, therefore eliminating the need for expensive branches.
It's another story stateside, though, with the legion of U.. bank competitors ranging from traditional banks to mutual funds to Internet-based banks and brokerage firms. It may, therefore, prove a much tougher nut to crack.
Perhaps it's a good thing, then, that Robertson also runs a 24-hour prayer telephone line. It may just come in handy.
Written By Suzanne Miller, CBS MarketWatch