Where's the anarchy in U.K. banking?

Photographer: Graham Wood/Evening Standard/Getty Images

Sex Pistols Credit Card Is Pretty Vacant

Mark Gilbert is a Bloomberg View columnist and writes editorials on economics, finance and politics. He was London bureau chief for Bloomberg News and is the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”
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One of the more depressing tweets I've seen recently arrrived courtesy of Richard Branson's Virgin Money business:

Source: Virgin Money

Punk, it seems, is finally dead, no matter what the graffiti say on pub toilet walls. It makes me sad that Virgin Money is commandeering punk rock for its marketing campaign, but more because of the scant prospect of the promised anarchy in U.K. retail banking than out of nostalgia for the golden age of punk (before it sold its soul).

At a time when anyone with a computer can watch Miley Cyrus swinging naked on a wrecking ball in a YouTube video, it's hard to explain just how shocking the Sex Pistols were in the mid-1970s. I remember almost wearing out my copy of "Anarchy in the U.K."  and my mother tutting at tabloid pictures of Sid Vicious in a swastika T-shirt.

Never mind that The Sonics, Los Saicos, the New York Dolls, the Ramones, the Stooges and the Stranglers all predate Malcolm McLaren putting Johnny "Rotten" Lydon in a rehearsal room with soon-to-be bandmates Glen Matlock, Paul Cook and Steve Jones. Lydon's evil chuckle in the intro to "Anarchy" reeks of the mischief the Pistols wrought and the revolution punk brought to the music industry. It was all epitomized in the fanzine exhortation "this is a chord, this is another, this is a third. Now form a band." Thousands did, emboldened by the disregard the Pistols showed for musicianship and technical ability over passion and snarling.

So seeing punk-record album covers in credit-card promotions triggers a bit of melancholy, but no more than that. The Pistols, after all, were always all about the money. "The only notes that really count are the ones that come in wads," went the lyrics to their masterpiece "The Great Rock 'n' Roll Swindle." They called their 1996 comeback tour "Filthy Lucre," while Lydon appeared in a commercial for Country Life butter in 2008. When they buried McLaren in 2010, the blue-and-white floral display adorning his hearse read "Cash From Chaos." And the official Sex Pistols Twitter account greeted the news of the new credit cards with an enthusiastic "it's great to see Virgin Money acknowledging the Sex Pistols."

Jayne-Anne Gadhia, Virgin Money's chief executive officer, was simultaneously apologetic and defiant in defending her hijacking of punk:

There will, I’m sure, be all sorts of debate about our approach. And I’ve thought hard about whether this is the right thing for us to do. But in the end, I’m proud of Virgin’s history. Proud of the difference it has made in the world. And proud that we have a chance to be cool.

Given that the Pistols were signed to the Virgin record label when they launched "God Save the Queen" in 1977 on an unsuspecting nation, in time to get the record banned amid Royal Jubilee celebrations, Gadhia has a point about Virgin's proud history. But she's as wrong about being cool as she is about Virgin Money revolutionizing retail banking.

A series of government investigations and initiatives has failed to introduce much competition into the industry. The four biggest U.K. banks control more than 70 percent of the 80 million personal checking accounts (known in Britain as current accounts). Of those, just 1.1 million customers switched banks in the 12 months to April.

Newcomers such as Virgin, built on the skeleton of failed mortgage lender Northern Rock, Spain's Santander and London-centric start-up Metro Bank, haven't made much headway against the entrenched Barclays, HSBC, Lloyds and Royal Bank of Scotland's NatWest. Virgin, for example, had 22.4 billion pounds of customer deposits last year, just 6 percent more than the previous year.

So trying to pretend that Branson's initiative in banking is akin to the creative destruction the Sex Pistols brought to the music scene is a stretch, or "pretty vacant," to borrow from their 1977 hit record. Banking remains sclerotic, barriers to entry for new providers are still too high, and differentiation between banks is almost nonexistent. As Lydon told the audience at the end of the final Pistols concert at the Winterland Theatre in California in January 1978: "Ever get the feeling you've been cheated?" 

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Mark Gilbert at magilbert@bloomberg.net

To contact the editor on this story:
Paula Dwyer at pdwyer11@bloomberg.net