Metro Bank Comes To Guildford Bringing a New Model of Banking

Published on: 7 Mar, 2013
Updated on: 9 Mar, 2013

Bill Board advertising of the new Metro Bank branch coming to the bottom of North Street

by Maria Rayner

A bank is launching a ‘store’ in Guildford’s North Street in April with a two-day grand opening party – to which the entire town is invited.

London-based Metro Bank, one of a new breed of ‘challenger’ banks hoping to dent the ‘big five’ of Lloyds, Barclays, NatWest, HSBC and Santander, intends to open 200 new ‘stores’ by 2020. This will be the fifth store outside the M25.

Metro Bank opened its first branch in Holborn in 2010, and Guildford is number 17. “We aim to be different. People are fed up with their banks and we want to be a bank that people are not fed up with,” said Rachel Cohen from the bank’s head office.

Guildford was chosen for its “great personal and business community”.

“The Metro Bank model is a simple one – to offer amazing customer service and convenience to retail and commercial customers. We don’t have an investment-banking arm or any legacy of previous bad practice like some of the others. Also, we will never lend more than we have and there’s no wholesale funding, we simply don’t lend what we don’t have.”

Inside things are different too. “Dogs rule at Metro Bank. We offer dog bowls and biscuits for our customers’ dogs, because our customers love their dogs, so we want to make sure they feel at home in our stores too,” Ms Cohen explains.

Children are also important to the bank. The company takes an active role in primary school financial education through its ‘Metro Money Zone’. There will be customer toilets, baby-changing facilities and free balloons. Staff members are hired for their attitude rather than their skills, with smiling rated as essential.

Staff are hired for their attitude rather than their skill – smiling is essential

Asked about these services, Ms Cohen said: “They’re absolutely not gimmicks. It all goes back to service and convenience. We want to offer things that people want and need, and to fit into their lifestyles.”

The Guildford economy will benefit from the bank opening on North Street. “Wherever we open a new store we create 25 new jobs,” said Ms Cohen. “We’re always looking for people who are bright and hard-working.” The bank’s call centres are in London.

The town was chosen for another ‘challenger’ bank’s first branch. Virgin Money, which bought out Northern Rock, chose to open on North Street last July rather than refurbish the old branch in Castle Street.

Virgin Money’s Simon Hall said: “We aim to provide customers with access to their accounts through the channels they prefer to use, so while we are building our online systems we are also investing in our store network.

Metro Bank – branches designed as ‘stores’ – bright relaxed and comfortable

“Our store on North Street enables customers in Guildford to sort their money out in a bright, relaxed and comfortable environment, with no hard sell. Feedback on the store from customers has been really positive.”

Banks and bankers are not popular with the public at the moment. Recent banking scandals linger in people’s memories and many blame the banking sector for the current recession. Banker bonuses, that many feel are excessive, only add to unpopularity.

Metro lost £23m in its first 16 months of operation, but this was due to setting up costs. In common with other UK banks, any investor savings up to £85k are protected under the Financial Services Compensation Scheme.

Metro Bank follows a model that achieved success in the US for its founder and new Chairman, Vernon Hill, who set up American Commerce Bank in 1973. In June 2010, it was announced that the bank had raised £126m of funding from private investment and fund managers such as Fidelity.

However, critics say the high street model is outmoded and Metro Bank’s products are not competitive enough to draw customers from the established banks. In its first 15 months the bank made only 100 mortgage loans.

Ms Cohen explained that the bank aims to offer a simple and transparent service with rates listed on a display board in the bank. Seven-day banking, early and late opening and instant issue cards support this. “Our one-year Fixed Rate cash ISA is one of the best on the market and we don’t charge on any cash transactions abroad.”