Banks need to start putting the customer first again, says Hannah-Louise Smith, Director of Cash Management & Transactional Banking at Metro Bank.
In 2010, Metro Bank opened the doors to its first store – making it the first high-street bank in the UK to open in over a century. It did so promising a “fresh start to banking” centred around its approach to customer service and convenience.
This has yielded some success. Today Metro Bank has a 55-strong UK branch network, operates 1.2m customer accounts and announced record deposit growth of £3.7bn; up 47% year-on-year to £11.7bn. It also started turning a profit for the first time in 2017, showing an underlying profit before tax of £20.8m.
Whilst much of the news surrounding this challenger bank centres around its retail offerings – including quirky schemes such as helping its customers with costs should they rehome a dog or cat from London’s Battersea Dogs and Cats Home – Metro Bank says it is also quietly building a growing business and commercial banking franchise.
This element is run by Hannah-Louise Smith, Director of Cash Management & Transactional Banking, who joined Metro Bank in 2016 having previously worked for RBS and Lloyds Bank. “Metro Bank is disrupting the UK banking landscape,” she claims. “And just like with our retail offerings, we are gaining lots of traction, putting the needs of our business and commercial customers first.”
Open to all
Presently, Metro Bank’s commercial and business banking portfolio is comprised of SMEs and middle market companies. Smith is keen to explain that the bank “is willing to rescue any size organisation from poor customer service that they have had elsewhere”.
In doing so, Smith says that rather than ‘reinventing the wheel’, the bank is “getting back to straightforward banking with a focus on service and convenience”. By this she means it offers all the services expected from a bank, but it is open seven days a week, giving customers more flexibility when contacting their relationship manager. “It is all about taking the stress out of banking and allowing our customers to focus on running their businesses.”
Smith also hopes that the bank’s approach to technology development will enable it to win more corporate and commercial business. Indeed, she says the bank continues to rapidly scale up its capabilities, based on customer feedback, to match that offered by other banks in the UK and serve the needs of larger corporates.
“When it comes to technology development, the key thing for Metro Bank is to be agile,” says Smith. “We are able to do this because we don’t have all the legacy issues faced by many other banks. As a result, we are able to develop solutions quickly to meet the evolving needs of our customer base, for example our Commercial Online Banking platform.”
Metro Bank is looking beyond its own walls to do this as well and is partnering with technology companies. The most recent example is the bank’s tie-in with Xero, offering its business customers accounting services through its online banking portal.
Age of the disruptors
Metro Bank is just one of many challenger banks around the world disrupting traditional financial institutions. Others include Starling in the UK, WeBank (owned by Tencent) in China, Timo in Vietnam and Idea Bank in Poland.
Whilst many of these banks are in their formative years, they are starting to make waves in their own countries. This typically occurs firstly in the retail space and then in the SME space, given the growing appetite of these banks to lend to small businesses. Metro Bank reported record lending growth of £3.8bn in 2017, up 64% year-on-year to £9.6bn, with loans to commercial customers representing 33% of its total lending.
It remains to be seen if these banks will ever challenge the dominance of the established names in the large corporate space. Smith is confident that Metro Bank can impact this market. “Large Corporates are impressed with what we have to offer and are coming to us interested in how we can help” she explains. “This, tied in with our unique approach to banking, should hold us in good stead to target these customers and ensure the revolution continues.”