Patrick Collinson in the Guardian has been taking a look at the new, soon-to-launch, Metro Bank, which promises “old fashioned service in an ultra-modern setting.”
The picture that Collison paints is actually of a very appealing banking service, with branches opening 7 days a week, from 8a.m. until 8p.m. during the week, and get this, they’ll also have customer toilets.
Customers will be able to walk in and, 20 minutes later, walk out with a current account, debit card, credit card and chequebook, with the cards personally embossed and ready to use.
They’re also planning a revolution in the way the bank is run; Metro will only lend what it brings in from depositors. There will be no “wholesale funding”, no 125% loans and no big bonuses for staff. How refreshing and thoroughly old-fashioned is that?
Customers will also be able to access their accounts online, so they’ll have the best of both worlds – the pleasure of a face-to-face consultation with their bank manager, together with the convenience of online banking.
So where’s the catch. Well, there’s two.
Firstly, the rates offered by the bank won’t always be the best, as the level of customer service they’re aiming to give needs to be paid for somehow, which means they need to build in some margin on their accounts.
And Metro are only planning to have branches within the M25, which means that for the majority of the country the branch benefits will be lost.
As the article points out, the next couple of years could be very interesting for banking, as we see new entrants, such as Tesco and Virgin, enter the market. Metro is likely to be a significant player in the market, but I can’t help but think that limiting the branches to London will stifle its growth a little, although this may be tactical from Metro’s perspective.