Dogs welcome is a strange introduction to the opening, next weekend, of the UK’s first new high street bank in over 150 years. The newcomer is Metro Bank. It promises to open seven days a week, including 8am to 8pm Monday to Friday, have a rapid account opening procedure and issue credit and debit cards within 15 minutes. For those with jars full of pennies it will also have free coin counting with the Metro Bank Magic Money Machine. And off course “the bank will provide free bowls of water and chewy bones to ensure that your four-legged pals are as happy as you are”! The initial plans are modest. Two branches this year and twelve within the next two years.
One of the guys behind the launch is an American entrepreneur Vernon Hill. In 1973, at the age of 26, he launched Commerce Bancorp in New Jersey, which he sold in 2007 for $8.5bn. At that time the bank had 435 branches and was opening 65 new stores annually. He called them stores because he based his model on brining fast food convenience to banking.
Link this to Virgin Money gaining a foothold in UK retail banking with the acquisition of Church House Trust and the continued expansion of Tesco Bank and you can see a push to introduce FMCG type selling to the staid UK retail banking sector. How customers will react to this change will only become clear over the next five to ten years. However, for companies supplying products and services to these new style banks they may need to start learning the rules of FMCG selling. Tesco retail requires service and product suppliers to have at least as good an understanding of Tesco’s customers as they themselves have. They assist you by supplying copious amounts of customer data. They charge you, however, for the data and insist that you provide them with any analysis you carry out on this data.
For Irish companies, in the Financial Services and Financial software sectors, looking to win business with these banks will create a new dynamic in your selling process. These banks will not only want to see what your offering does for the bank, but equally importantly what your offering will do to improve the end customer experience. Retail customers, such as Virgin and Tesco, are probably the most demanding you can ever expect to deal with. Personally, on a visit to the HQ of a major UK retailer I saw a supplier leave in tears after being worked over by a buyer. This supplier was not a small food supplier but one of the largest suppliers of shopping trolleys in the UK.
Looking forward to the changes and opportunities in banking over the next few years reminds me of the often quoted phrase from Star Trek “It’s life, Jim, but not as we know it”.
PS. Its interesting to see where Vernon Hill sourced his senior management – RBS, HBOS and Anglo Irish Bank!
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