Lessons from the Metro Bank

20 January 2014

Mike Curl

Mike Curl

Head of Finance, Services & Media

We’ve all had the lottery fantasy: speculating what our life would look like if money was no object. The business equivalent, particularly if you’re in IT, is to imagine what you would do if you had a completely blank slate. Would your business look the same? Would the IT infrastructure supporting your business look the same? The answer, at least on the IT front, is probably a resounding ‘no’ for most retail banks.

One of the key bugbears for any retail bank is dealing with legacy systems and culture. How can you move forward with ever-increasing speed and exploit tomorrow’s technology, when you are hostage to yesterday’s IT and practices? 

Well, we got to see one answer to that question when Metro Bank opened for business in 2010 - the first new retail bank to open a UK high-street branch for more than 100 years.  Three years later, it has more than 20 branches in the South East, but plans to expand to 200 by 2020. It is still making a loss, but it is on track to meeting, or exceeding, its plans for long-term profitability.

Dog friendly banking

The bank was founded by US entrepreneur Vernon Hill, who earned his banking spurs by launching Commerce Bank in the US. Metro Bank seeks to replicate that success here, with customer enticements, such as longer opening hours that includes evenings and weekends and also, somewhat quirkily, its dog friendly store policy. In May, it opened its first drive-through bank branch in Slough, so that customers can make deposits or withdraws without having to step out of their vehicle. And from a product perspective, Metro Bank promises to print debit cards instantly in-store.
Behind these and indeed all of Metro Bank’ initiatives, is the desire to make customer service its chief selling point. The idea is to treat customers well and make costs transparent (and as low as possible).  Rather than new, the attention to individual customer face-to-face care is more of a return to old-fashioned values of personal customer service.

Customer service rules

It’s interesting that the thing that Metro has chosen to focus on is not outrageously different banking products. Where it chooses to stand apart is its view on customer service excellence. Speaking to Banking Technology magazine in November this year, chief executive, Craig Donaldson, talked about how Metro Bank maintained its focus on customer service. Rather than sales targets, employees are incentivised on how they service the customer experience

From a technology standpoint, the thing to note is how little there is in-house. Metro Bank chose to outsource as much as possible and launched with just a handful of internal IT staff, focused mainly on supplier management. Metro’s view was that owning equipment would mean it was obsolete the moment it was installed, whereas outsourcing meant that the technology was constantly being refreshed and state-of-the-art.

Bank co-founder and Chairman Anthony Thomson said at the launch that the bank actually spent very little on IT: the software was hosted externally and, instead of desktops, staff had Blackberries. Today, that technology has been refreshed and staff and customers are using tablets in-store, Microsoft Windows 8 is installed on all its systems, a new website and a mobile banking app are on the cards.

The key focus was that IT had to support its goal of excellent customer service: it’s a means to an end. To create that excellence in service it was important to have a single view of the customer. But rather than struggle to get disparate, siloed systems to talk to each other and provide that one view, the IT set-up was designed with that as its primary goal.

So what does a new bank look like? Well, in the case of Metro Bank, it’s a mixture of old and new. The new is the technology, appearance of branches (or stores as Metro prefers to call them), but this is juxtaposed with a return to old-fashioned values of personal customer service.

 

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About the author

Mike Curl

Head of Finance, Services & Media

My interest in technology started in 1981 when a friend’s father built a Sinclair ZX81 and then relied on the two of us to program it. I soon moved on to my own BBC “B” computer (thanks dad!) and amused the family with some very rudimentary INPUT and PRINT statements…

My passion continues but on a much bigger scale than I could have ever imagined.  Today, I advise business and IT teams at some of the largest organisations in the world, helping them design, implement and exploit the latest technology in support of their business priorities and challenges.

I co-founded Bluefin in 2002 after spending many years in the consulting industry, having started at Andersen Consulting in 1994.  With Bluefin, I have been fortunate enough to be involved with some truly ground-breaking projects and technologies over the years.

What I really enjoy is finding the business value of new technology and leading the pioneering engagements to implement it successfully for the first time. Barclays, a client I lead at Bluefin, has won several industry and partner (SAP) awards for the innovative work we did with them around enterprise mobility. At another client we’ve also been doing some truly amazing work with SAP HANA that has the potential to disrupt established business models.

Bluefin and SAP S/4HANA - welcome to the one horse race

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