Egg and Prudential Banking

“In a fast-moving sector Egg will continue to harness technology in order to develop its range of products and services still further.” Mike Harris, Chief Executive, Egg.

Our new direct brand, Egg, was launched in October 1998, offering customers a range of market-leading deposit, mortgage and loan products by means of Internet and telephone. Prudential Banking products continue to be sold through the direct salesforce, targeted at a different market segment from those of Egg.

Egg’s launch clearly captured the imagination of the UK public as a new way of dealing with their financial affairs. Our marketing and celebrity-led advertising campaigns produced a remarkable and initially overwhelming response: since launch, Egg has received over a million telephone calls, opened over 250,000 accounts and taken over £3 billion in deposits. The Egg brand is now widely recognised, receiving over 60 per cent customer recall.

The focus of Prudential Banking has been on mortgages, sales of which reached £466 million in 1998, more than double 1997 levels, while deposits stand at some £800 million. Prudential Banking continues to provide a natural facility for customers to bank funds from their maturing policies.

Egg’s Internet site has proved enormously successful with over 350,000 visitors since launch whilst its call centres in Derby and Dudley handled over one million calls.

Egg is one of the first financial services brands to make comprehensive use of the Internet on a fully integrated basis. We are greatly encouraged by the number of enquiries and applications that have come through this route. This is an important development of Prudential’s strategy of providing a broad range of products and services through a greater choice of distribution channels. The benefits of e-commerce are highly significant: access to valuable customers, lower costs and potentially higher cross-sales ratios. It is also a means of building relationships with large communities of customers and providing a foothold in this key market-place of the future.

Henley Centre research concludes that by the year 2013 two out of every three financial products will be sold by electronic means. The United States is already providing us with evidence of the impact of e-commerce – last year consumers in the USA bought US$8 billion of goods through the Internet, a 300 per cent increase on the previous year. This major launch into the e-commerce market will prove an important growth opportunity for our future business. We have already significantly extended the Internet capability of Egg by giving customers the facility to check savings balances and transactions on-line.

As the technology revolution continues apace, Egg will broaden its range of products and explore new ways to exploit the Internet, personal computer technology, mobile devices and digital television, in order to complement more conventional telephone and direct mail facilities. Our new call centre in Derby is now operational and later this year employees will be transferred to the purpose-built Pride Park communications centre which has been designed to encourage positive relationships between Egg staff and their customers.

The success of Egg has meant that the overall investment in Egg and Prudential Banking is marginally up on the initial forecast at £77 million. It is likely that 1999’s investment will rise to around £100 million with a small profit forecast for 2001.

For more information, please visit Egg’s website: www.egg.com