Don't Bank On It

With the contraction of Shanghai Lil's (HSBC) and possible retreat to the East there is talk that its UK holdings may revert to being The Midland Bank and perhaps even sporting the Griffin Logo of old.  For some of us it brings to mind past ages of banking.

It is sixty years ago and a youngster wearing a battered tight sports jacket and trousers with worn knees enters a branch of the Midland Bank.  But there is a white shirt with a stiff collar and a tie with devices on it.  On making it to one of the tills the clerk looks down his nose.

The youngster wants to open an account, the clerk is taken aback, this is not the sort of person with whom they like to do business.   Eventually, the clerk concedes that a manager might be approached to deal with this higher level matter so the youngster, after waiting for some time, is shown into the manager wondering whether to tug his forelock or fall to his knees. 

The manager looks frostier than the clerk.  On being told that the person is about to become a student does not help but then it is made clear where and that the studies will be reliably funded.  The manager tells the youngster it can only be a short term matter because military service will follow.

The youngster tells the manager that he has done it and with whom.  The manager looking at the tie realises that he has a problem and concedes.  The youngster is signed up with the Midland Bank.  And so it remained for many decades even with work and retirement taking the former youngster to different locations around the kingdom.

But in 1999 the HSBC, already by now having a major holding dumped the Midland Bank name and history to create a new modern all bells and whistles banking, other finance and near loan sharking company playing fast and loose with the currency, credit and other finance markets.

The former youngster had gone from being a high risk account holder to being a regular customer who could expect a polite reception and reasonable attention, but no longer.

This ended and instead of clerks being willing to help going to the bank meant fending off the over eager sales staff before any ordinary business could be attempted, hence the Shanghai Lil term.

Now the debate is about how this new UK bank, maybe called Midland might position itself in the banking sector. Will it become a retail bank servicing ordinary general customers like the Midland Bank of old, will it become more of financial services agency or will it some kind of messy mix and not so much customer friendly as out for the main chance?

We do not know because banking is now in the throes of major changes, technological impacting on function, service, staff and jobs; structural in a rapidly changing world and regulation which will largely be determined by agencies and governments who know little and understand less about the changes in progress.

Meanwhile the former youngster is now looking at his options.  The Midland Bank was founded in 1836 and he has a cash box at home dating from that period, a family heirloom.  One option which is very attractive is to go into cash and make greater use of the old cash box.

Back to the future to coin a cliche.