EP Business in Hospitality Issue 48 - January 2014

BUSINESS
horizon to get the return on your
investment. We see ourselves as
the entrepreneur’s bank and our
customers have built up their business
from inception, but are still very much
the decision-makers and what they
want from their bank is someone with
the same level of decision-making,
proactivity and responsiveness.”
Jason says he “spends a significant
part of his week with customers as it is
a core part of our model to spend time
with the entrepreneurs and really
understand their objectives and their
business and build a joint approach.
It makes such a difference and
customers really like that intimacy.”
Timing of entry into the UK market
has also contributed to Metro Bank’s
successes. The British public had lost
faith in the traditional banks due to
a series of scandals, PPI, derivative
mis-selling, government bailouts
and money laundering. But since
there were so few players, and all
have been tarnished, Metro Bank was
almost seen as a breath of fresh air.
“Our model is a clean model; we
offer loans, make deposits and
traditional banking services. Some
of our competitors, in their desire to
broaden their offering, have gone into
pensions, investments, life cover, etc.
and this has its own set of issues. We
have a simple range of products and
we don’t have any product sales
targets – it’s all service led. What you
tend to find is if you offer great
service, customers trust you and
you build a good relationship. You
look after your customers and they
will keep banking with you.” Metro
Bank has no desire to diversify into
offering products such as pensions,
insurance and investment funds,
due to the risk associated with
misalignment of customer
interests and the bank.
Seeing an opportunity to offer
more traditional services the company
“The appetite for
a new bank in the
UK is far greater
than in America”
has begun offering Safety Deposit
boxes – the uptake for which has been
phenomenal, with almost all boxes
having been sold already. While HSBC
have disbanded their Asian business
unit and diverted customers back
into normal portfolios, Metro Bank is
about to launch their Asian business
unit for Indian, Pakistani and
Bangladeshi customers. They want to
get closer to the community and add
value. In July, the bank acquired SME
Invoice Finance, a provider of
alternative forms of finance and
working capital to small and mediumsized
businesses. SME was a “great
cultural fit”, and has meant the bank is
able to offer an enhanced proposition
to their SME customers by providing
additional services such as asset
finance and debt finance.
Customer service is a key part of
Metro Bank’s strategic proposition.
This commences in the recruitment
process, where the selection criteria
requires all potential employees to be
genuinely customer orientated and
have a real desire to want to help
customers. Every experience is seen
as an opportunity to enhance the
relationship. “There are training
programmes to foster and nurture
customer service, which is important
for every employee. It’s about
providing excellent customer service
externally as well as internally. I’ve
worked in this industry for over 30
years, and this is the most positive
culture I have experienced. I know a
lot of banks talk about being customer
orientated, but it’s in our DNA. We
want to provide a retail-led experience
and we measure ourselves against
the likes of John Lewis and Apple, we
don’t measure ourselves against the
likes of other banks, as they are not
sufficiently challenging enough for the
service experience. We want to be the
best in the industry for service, not
just banking.”
What have been the biggest
challenges to break into the British
market? “You need to get to a certain
size and scale to get visibility. We can
relate to entrepreneurs because four
years ago we didn’t exist and had the
same growing pains when building
our business from scratch. What’s
really encouraging is the level of brand
awareness – we are getting a lot of
customers through word of mouth.
There’s a level of momentum and
growth, which gives us a real sense
of confidence.”
Many growing businesses tend
to suffer due to insufficient resources,
funds, manpower, etc. or they do not
have the infrastructure in place to
cope. Metro Bank have taken steps
to avoid this risk by rolling out in
phases – slower at the beginning
and accelerating over time.
“It is a geared model, as the first
stores have become profitable and
that allows increased investment.”
Store openings have been
concentrated in London and the
South East, as the store network
supports each other, which
facilitates the growth.
The Metro Bank concept is new
and refreshing, but it comes at a
cost. The bank has reported losses
of £100 million in the three years to
July 2013. So when does the bank
envisage making a profit and bringing
value to its shareholders? “Our
growth is ahead of plan and there
is an appetite to continue to support
the brand and its growth.”
With aggressive expansion plans,
can Metro Bank continue to provide
customers an unrivalled service and
give shareholders a lucrative return
on their investment? Only time will
tell, but it will no doubt be an
interesting journey. •
EP | January 14 | 7