Last week BBC interviewed Craig Donaldson, the founder and CEO of Metro Bank as part of their ‘Boardroom Stories’ series of interviews with leading CEOs in the UK.
Metro Bank was launched in 2010 and was the first completely new High Street bank in the UK for over 150 years. Donaldson has a very different approach to banking and although his company is a regular full-service retail bank with branches – not just an online app – his company is entirely built around customer centricity. Everything is designed to help the customer.
This even starts with the language used. At Metro Bank, they have ‘stores’, not ‘branches’. Donaldson explains: “You go to a store for service. You go to a bank branch to wait in a miserable dark queue. Language is really important for us. We want to create a culture where we have fans. Last year we only spent £100,000 on advertising. Our customers go out and tell their friends and family about us for nothing.”
Isn’t that such a complete contrast to most banks? They don’t need to advertise because everyone who ever interacts with the bank becomes a fan. I know that I can personally remember a friend enthusiastically telling me that Metro Bank not only welcomed her into a ‘store’ with her dog, but the bank staff had biscuits and water available for customers with dogs!
Metro Bank is also open seven days a week and Sunday is a very busy day for them. Donaldson said: “We see more business customers on Sunday than any other day. Think about it, if you are a builder, decorator, or accountant then you are working Monday to Friday and sometimes on Saturday too. You need to do your books on Sunday. You can just pop in and deal with your banking when it suits you.”
Of course most new banks at present seem to be just launching as virtual companies that only exist on an app. Why does Donaldson think that he needs a branch network in 2018?
“We still need stores. We have 55 stores at the moment, but we want to grow to about 250 across the country. I was paying bills on my mobile last weekend, but [you need a store] if you are getting a mortgage for the first time, or you have a problem with your account, or you might have lost a card, or you might be a small business that wants to deposit cash.” He added: “Most people use the app, but it’s still important to have stores. The difference is that we put our stores in places where it is easy for customers – look at our store by Holborn station for example. Our stores are open from 8am to 8pm and in the case of the Holborn branch, over 35m people use that station every year – that makes it really easy for a lot of people.”
Donaldson strongly believes that it’s not how many bank branches you have, it’s all about locating them where it is easy for people to visit. He also stressed that there are some services they offer in their stores that no other banks on the High Street are doing. He said: “Have you ever lost a bank card? Instead of waiting a week for your bank to replace your card, if you come into any of our stores, we can create a new one for you inside 3 minutes.”
That’s impressive and redefines the branch (or store) as far more useful for customers as they are used to. Metro Bank has had some other advantages. Because they launched from scratch and could design real-time systems as they wanted everything to work, rather than relying on decades-old legacy technology, they can implement new changes quickly – such as the recent launch of Open Banking in the UK.
Donaldson said: “We have launched our Open Banking offering and it cost us about £1.5m to implement the entire system. I have heard of other UK banks spending over £200m to achieve the same level of readiness. It’s the same API (the standard interface that all UK banks are using to share data) and everyone has to do it the same way, but they have old legacy batch processes they need to manage.”
Let me know what you think about the Metro Bank approach to retail banking and their focus on customer experience by leaving a comment here or just get in touch direct via my LinkedIn.