Lessons from Metro Bank: Disruption in the name of customer experience

In February’s Management Today, Baroness Denise Kingsmill said this about the UK’s retail banks:

“Everyone hates their banks. We all have a relationship with one and yet we don't trust them. They were responsible for the biggest financial collapse ever; they are addicted to an obscene bonus culture, and too many individual bankers are unspeakably arrogant.

“Even when conducting the most mundane of banking tasks they are slow, cumbersome and bogged down with outdated systems that stop us readily accessing our own money. Yet we stick with them. Why, when we have come to expect fast personalised service in so many areas of our life, do we tolerate such poor behaviour in the financial services that we use?”

The answer is, we don’t. Or at least, we won’t. Not for much longer.

Following the financial crash in 2009, High Street banks have been under intense pressure to adapt the way they operate. “If we don’t change the fundamentals and improve for our customers then our business will be eaten away,” Ross McEwan, chief executive of Royal Bank of Scotland (RBS), warned last October.

Amid changes to consumer protection laws and a steady increase in the number of people switching accounts, some of the UK’s big four banks, like Lloyds, have rebranded and broken the shackles of certain divisions, such as TSB, to try and provoke the perception of resurrection with their customers. Others, like RBS, have focused on branch closures in an attempt to streamline their processes and appear more digitally-minded.

However, legacy still remains a hindrance, and major breaches in trust such as HSBC’s recent Swiss tax scandal haven’t helped; leaving most consumers questioning their banks’ desire to truly change the experience they offer. All of which is playing into the hands of an upcoming breed of disrupters - known as the challenger banks.

Dogs, kids and tiled floors

There are said to be as many as 25 challenger banks awaiting regulatory approval from the Financial Conduct Authority. While the majority will follow the lead of First Direct and offer a completely branchless experience, one of the new players already approved and building a substantial profile for itself over the past five years, has chosen to follow a more traditional route into market, instead honing in on customer experience as its chief weapon of disruption.  

Metro Bank opened the first of its branches in July 2010, in London. Founded by Vernon W. Hill, an American finance pioneer who had already shaken up retail banking in the US with his Commerce Bank brand, it was the first new High Street bank in the UK for 100 years. Since then, the expansion has been steady. 33 further ‘stores’ have opened in London and the aim is to reach 150 stores by 2020; growing sensibly and centrally, from the capital outwards.

Customers are streaming into its doors – its 2014 financials show growth of 118% across the year, a  number of new branches and opened accounts increasing to 447,000; year on year growth of 63%. Customers call themselves ‘fans’, and the brand has been hailed for the innovative approach it has taken in the sector.

But how exactly can a bank be seen as a disruptor, when from the outset, its basic premise appears so similar to the banks it is ruffling the feathers of?   

Metro’s method is to pin down all of the pain points the current banking process creates for its customers, and rectify them. It’s a simple but effective remedy – using a combination of customer feedback and employee engagement to continually question the reasons it does things a certain way, and how all processes can be made better.     

“It’s always been about doing what’s best for the customer,” says Andrew Richards, director of regional retail banking for Metro, and a key member of the team overseeing customer experience within its branches. “If that means you want to come into the store, then great – we’re open seven days a week. Our stores are actually only closed for three days in the year.”

“If you want to call, we have a contact centre that’s available live, 24/7 every day of the year. We have options for online banking, mobile banking as well as the physical stores. Our approach is – whatever works best for you will be delivered by us. It makes sense – we’re a retail bank, therefore we need to act like other retailers and be open the way they are.”

This attitude towards customer experience (CX) has led to a number of Metro’s branch offerings being given some major media gravitas – the layout of the bank is styled to look completely different to the other big four High Street banks. Black and white tiled floors give the impression of an American diner, and the cashiers stand behind open desks and greet customers as they walk in. The bank allows customers to bring their pets into store, and there is a strong drive to deliver events for the local community, many of which place emphasis on helping the younger generation.

“There is an incredible lull in banks taking up the High Street, but what’s proving very successful with Metro is becoming a key part of our communities,” says Richards. “That’s not just about having a presence on the high street though; it’s about our involvement with local schools in teaching kids about money, banking and saving; working with local businesses to give them a help with their finances, that sort of thing.

“We are looking at every aspect of CX. If it’s your first time in the store we give you a tour so you know what’s different about Metro, and helps you reinforce the decision of leaving their bank to come to us. Most banks, when you open up an account, will send you your card through the post in a couple of weeks. We’ve figured out a way in which a machine in our store can print you your debit card then and there in-store. We also sign you up and get you using online banking straight away. It allows customers to get everything sorted within minutes of signing up.”

Empowering employees

While the shiny, brash vision certainly gets peoples’ attention, some of the bank’s critics have called it a gimmick. Moneywise’s Cathy Adams once described Metro as “banking does Dallas” and questioned how a new bank can have enough of an effect on such a nationally-antiquated system when it has so few branches and has yet to expand beyond the Greater London district.

Richards dismisses this type of criticism: “people have become disenchanted by other High Street banks. If people were happy with their retail banks we wouldn’t have been as successful as we are.” He also points to the fact that any disruptive force has its critics, and believes that the lack of rapid expansion is one of the sole reasons Metro is able to adhere to its core promise:

“We’re incredibly conscious of not expanding too fast and losing some of the experience that we’re able to deliver on,” he adds. “We’re growing outwards as a network because all of our banks are there to support each other.”

And part of this support is delivered through the empowerment of employees; an aspect that is slowly seeping into the understanding of customer experience delivery – perhaps best highlighted by CX expert, Bruce Temkin’s recent statement that 2015 was to be “the year of the employee”.

In Metro’s case, that means giving employees the right technology tools to be able to raise issues when part of the customer experience strategy don’t make sense. Part of the benefits of not having other retail banks’ history is the lack of legacy systems, and Metro’s employees are able to work from a single customer view; through the use of a CX dashboard they can see when someone has called the contact centre, or been in-store, and keep a continual track of every point at which a customer has interacted with the bank.

Employees are encouraged to use Yammer to engage with one another across branches; and also to “highlight when they’ve gone above and beyond the call of duty in helping with customers, as well as drawing out the stuff that makes you scratch your head; has you wondering ‘why’”.  

“We’re really focusing on getting colleagues as well trained as possible in ensuring the customer experience is phenomenal,” says Richards. “There’s no silver bullet in terms of technology, or magic products. We make sure we’re listening to customers and passing information around to improve customer care. 

“To have all colleagues empowered to help a customer instead of having to go through central teams is the most critical aspect.”

The brand is also a big advocate of Net Promoter Score (NPS), asking customers directly what they think of the CX processes and tying the information gleaned from both customer and employee to gain insights about what is going well and what isn’t.

“We ask customers directly as to what they think of us, and that’s really powerful. We also track any complaints or form of dissatisfaction and make sure we resolve the problems. It’s a lot of information running through our HQ but there’s insight in everything. There is something to learn from both negative and positive feedback.”

Simple but effective

Regardless of your opinion about Metro’s supposed gimmickry, there’s no question the bank has unsettled the retail finance sector. Regulators and industry voices ranging from the government to the British Banking Association have all held Metro up as a pillar for further competition in the banking sector, and the refreshed approach banks such as Lloyds and HSBC have taken to their own high street branches prove customers are clearly desperate for something new. Gimmicks or not.

“It’s about giving people first-hand experiences,” Richards adds. “We don’t just go out to schools and teach; we let the children come to the store, and go into the vault and see the safe deposit boxes. Then there’s our 5 for 5 club, which helps teach the value of saving. We’ve only recently opened the first drive-thru bank in the UK. We don’t tie our pens to the counters.

“It’s small things but they all show that we’re thinking about the pain points of customers in our sector. Anyone that has customers should be thinking about how they take care of them, first-and-foremost. That’s where you get repeat business, loyalty, recommendations. Making sure that the customer is put first is the most important thing.”