Since the financial crisis, we’ve seen the number of banks and building societies shrink, as many of the weaker institutions we’re taken over by stronger players.
Remember the merger between Halifax and Bank of Scotland with Lloyds TSB to form a new super-bank, Lloyds Banking Group? Alliance & Leicester and Bradford & Bingley have been subsumed into Santander, which already owned Abbey. And then Nationwide rode to the rescue of struggling smaller building societies the Cheshire, Derbyshire and Dunfermline.
But now the dust has settled a bit, the banking industry here in the UK is beginning to expand again. The EU has said that rather than have a few super banks it would prefer to have more smaller players operating in the market. Virgin and Tesco have both said they plan to increase the roles they play in the banking arena and open branch networks. But we’ve also got a totally new player in the market.
Metro Bank has opened its first branch in London and it plans to roll-out nationwide. So how is it going to make its mark in the market and should we all be signing up as customers?
Q1. So Paul what exactly is it that Metro Bank is offering that’s different from what we already get from the banks and building societies we already bank with?
Paul Marriott-Clarke: So customers tell us that they don’t think there’s a bank out there that’s worth switching for. Metro Bank really is a bank that’s the first to be worth switching for – we are about giving customers great value by offering them service and convenience to be able to bank how they want, when they want. We’re open twice as long as any other bank in the high street – we’re open 361 days a year – and we give all our customers the same great level of service that we think they’re looking for.
Q2. But apathy is a real problem here in the UK, and even offering “best buy” market leading rates isn’t enough in many instances to get people switching, so do you think good value and good customer service is enough to encourage people to move?
PMC: We’re able to offer all our customers the same great rate. This isn’t about needing to shop around to find the best deal in the high street at a given period of time, and needing to keep moving your money all the time. We can give fair, transparent pricing with no gimmicks.
Beyond that, we can take our service model and really deliver some key moments of truth. We can print debit cards and credit cards here in store, we can print chequebooks for customers in store; the fact we’re open early and late and seven days a week means that customers have got access to a real person, face to face, to bank with whenever they want to. It’s a great choice, an alternative to a phone, an alternative to the internet – although we offer those for customers that want them, we’re here in store to talk to them as well.
Q3. One of the things you’re saying is that people don’t think there’s a reason to switch and worth switching for, and if customer service is so important to people, why isn’t it possible to offer both? So offer the best rates and also offer really good customer service?
PMC: We do offer great rates. Hopefully when customers actually see what’s behind Metro Bank they’ll see that it’s about fair and honest banking and actually that is great in terms of the rates we can offer. We don’t have the burden of sort of ‘past debts’ to worry about, and our competitors are out there trying to recover their own financial position by charging existing customers more, so it’s a bit of a myth that we can’t charge great rates.
But we’re about value, we’re about long term rates; you come to us if you value service, if you think that banking virtually should be done how it used to be done. We’re a traditional bank with modern technology.
Clare Francis: New entrants and increased competition should be great news for consumers, and while Metro Bank may be the first new bank we’ve had for a while there are other brands, which as far as most of us are concerned, are totally new names.
For example, Bank of Baroda, which is an Indian bank, has just started offering mainstream savings accounts here in the UK, and in the credit card market the Creation card is new, although its part of a joint venture between BNP Paribas, one of the world’s largest banks, and Galleries Lafayatte, a French retailer.
Q4. So all these new entrants into the market Kevin, is this good news for consumers?
Kevin Mountford: Yes, it’s great news. At the end of the day we’ve got a good competitive market here in the UK, but the addition of new brands across a wide range of retail banking products has to be good. The interesting thing is that the different propositions that are coming out are different routes to market.
The only thing I would add is maybe a bit of caution because of the fact that it still needs consumers to take advantage of all these offers. It’s down to everybody to look what’s available, get the right product for them, and obviously make the best of their financial services products and services.
CF: We now have to take advantage of this extra competition in the market and vote with our feet – and that means if you’re not currently getting the best deal, switch to a new account.