Metro Bank interview: A high street bank's expansion strategy bucking the trend

Q For those unfamiliar with the Metro Bank brand and concept, can you explain what you offer?

A When we opened seven years ago this month, we were the first high street bank in over 100 years to get a brand new banking licence in the UK. The model that we have established is one that prides itself on providing customers with amazing service and convenience.

Our retail and commercial customers’ experience is something which other British banks don’t offer anymore and that is one where the customer is king.

Q While the traditional retail banks are rationalising their portfolios, Metro Bank is going in the opposite direction. What is your rationale for opening high street sites?

A Like any great retailer, you have to offer customers a multi-channel approach. You have fundamentally got to empower customers to choose how, when and where they bank with us. We cannot be dictating to customers “you must go online” or “you must do telephone banking”; the choice is theirs.

So, we offer a physical retail experience supported with amazing technology. We offer online, telephony from UK contact centres (in fact they are above and behind our stores), as well as an award winning mobile app. This is all to give our customers a banking experience which you cannot get anywhere else on the high street.

Q How many sites do you currently have and what are your short and longer term objectives in terms of expansion?

A We have 48 stores at present and we are looking at opening to in excess of 100 by 2020. From there we will move into a rolling strategy which will include the rest of the UK over the coming years.

Q With such an ambitious store target is your team growing at a similar rate?

A We are in fact looking to strengthen our property team. We are looking for people who share the values of Metro Bank and want to join our revolution in retail banking by acquiring leasehold and freehold properties and developing new stores.

Q What sort of towns/locations are you predominantly targeting? What particular boxes need to be ticked?

A We need to be in every vibrant town centre and city centre, but they are not the only locations to look at. We will also need second stores in the bigger towns and cities, and therefore we will start looking at shopping centres, retail parks as well as roadside locations but fundamentally the one common characteristic of them all is busy, visible and accessible locations.

Q How do you differentiate yourself from traditional retail banks?

A We differentiate ourselves in a few ways:

• We are open 8am - 8pm Monday-Friday, 8am - 6pm on Saturdays and 11am - 5pm on Sundays. We are open bank holidays too. We are only closed three days a year: Christmas Day, New Year’s Day and Easter Sunday.

• We provide an unparalleled banking experience — one where customers visit our stores at a time convenient to them with no appointment and can walk out, with a fully functioning account in around 15 minutes.

So, in 15 minutes 80% of our customers can get a bank account opened and a debit or credit card printed in store while they wait. 60% SME customers get a bank account opened in a matter of hours, not weeks. Most of our customers only need one form of photographic ID to open a bank account so a driving license or passport will be sufficient.

• We provide safe deposit boxes in all our stores and free coin counting machines for customers and non-customers.

• We provide a physical retail banking service, contrary to our competitors, who have closed down stores, moved away from the high street

Q Within a town or location, what constitutes a good site? Particularly in terms of unit size, pitch and adjacencies?

A We are looking for a minimum of 3,000 sq ft. We prefer to be close to other service retailers such as the foodstores, chemists, train stations and everyday use stores. Whilst being close to the other banks is nice we would much rather be taking space from fashion retailers etc. We are not interested in traditional banking properties; we want units and shops that have got lots of glass and high ceilings in prominent locations.

Q Many of your sites appear to be corner pitches. What’s the thinking behind that?

A It is really about the visibility and accessibility of the stores so customers want to come in. People do not tend to browse banks when they are out shopping so we need to make them as convenient as possible and give them a reason to come in; whether that be to switch accounts, use our toilets or attend one our business networking or community events, we need to give these people a reason to come in.

Q Whereas retailers can run store-based P&L accounts to gauge and monitor performance, how do you assess whether an individual branch is pulling its w eight?

A We are more akin to a retailer than a bank in terms of the way we operate and monitor performance, and most importantly the way we seek the validation and feedback from our customers in terms of level of service. We have mystery shoppers in our stores weekly in order to ensure we maintain our high standard of customer service – that is the way we win and retain customers.

Q How many customers do you have and can you give us some indicative growth figures? Any statistics you can give us regarding new customer recruitment?

A We just released our second quarter results. We opened 58,000 new customer accounts in Q2, taking us to a total of 1,045,000. Furthermore, our profits for the last quarter doubled to £4m, our fourth consecutive quarter of profitability. We remarkably opened our one millionth customer account during the May Bank Holiday, whilst all of our competitors were closed for the day! That was also less than seven years after launch – significantly earlier than our original target.

Q What is the typical demographic of your customer base?

A  If you ask our chairman he will say “everyone”, and if you asked him “who would you want to bank at Metro Bank?” he will say “the entire market”. We can offer fantastic service to corporates at one extreme down to local market traders and school kids at the other. People wanting to open a bank account with Metro Bank are never sold products and they are able to use for day-to-day spending with no additional charges.

We offer services to attract a full range of retail and,commercial customers throughout the UK.

Q Retailers are generally striving to achieve a seamless multi-channel proposition. Do you see parallels with Metro Bank and your embrace of both digital and physical sites? How do the two interact?

A Totally – we offer a multi-channel approach to give our customers the opportunity to be supported by our colleagues through whichever channel they choose to access the bank. Our Single Customer View enables our customers to access all of the account content and make any changes they wish, whether they contact our call centre at 2am, walk into a store on a Sunday morning, or use the website or app.

Q Would it be fair to interpret your commitment to opening new sites as a vote of confidence in the high street?

A Absolutely, we believe in vibrant town centre locations whether they be traditional town centres, shopping centres or retail parks. We support Business Improvement Districts (BIDS) everywhere we go and we endeavour not only to bank with them but to have one of our colleagues on the BID board. 

Through that partnership in town centres we are investing not just money, but also our time and effort into the success of each retail hub or high street.