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Metro Bank: Which? Q&A with managing director

Paul Marriott-Clarke on the new bank's plans

Metro Bank

Metro Bank aims to open 200 branches within 10 years

Metro Bank’s retail managing director Paul Marriott-Clarke tells Which? principal researcher Martyn Saville about the bank’s plans, aspirations and products.

What makes Metro Bank different?

What you’ll see at Metro bank is all about value, not only through the headline prices on financial products, but also through service and convenience. The biggest part of the banking proposition is the day-in day-out service customers get. We are open 361 days a year, both early and late.

What about products?

What you find at the moment is that the banks, as a result of the bad books they’ve got, are having to find as many new ways as possible of appearing to offer great value, while at the same time in the small print managing their margins in quite an aggressive way. That’s why you see this level of dissatisfaction in the market.

What you see [with Metro Bank] is a long-term, open and transparent banking model. We give every customer the same great rate. What they see is what they get, and it’s all long-term pricing.

It’s a traditional bank where we bring in deposits from current accounts and savings and we lend that money out through overdrafts, credit cards, personal loans and mortgages.

How will customers be able to manage their account? Is it branch-only?

We want a relationship with our customers. So when you open an account, we take a photograph of you – it’s the easiest way for us to protect your money when you come into store, to check that you are you.

So, for our initial customer set-up, we do need the customer to come into the store. On day one, we’d like to start the relationship with a handshake and a conversation face to face. Following that, customers can decide if they want to bank in-store or online. 

What current accounts are you offering?

We have two choices of bank account: the current account with a debit card, cheques and direct debits. For customers who don’t want access to a traditional banking service, there is a simple Cash Account, available for anyone over the age of 11. That comes with a MasterCard debit card that can be used in ATMs or in shops. You can manage the account online.

The packaged product, called Metro Bank Plus, is an option primarily for customers already enjoying the benefits of worldwide travel insurance, RAC breakdown and other cover. It’s £12.50 a month.

How about overdraft fees?

The overdraft interest rate is a flat-rate 15%. If customers make payments or use cheques when the money’s not there [in the current account], we will extend an instant overdraft. There’s a paid-item charge of £10, capped at six times in a month. There’s an unpaid item charge, where you put through a transaction and we’re not in a position to pay it, of £5.

The difference between us and some of the big banks is that most of the big banks have a monthly fee, so the first time you go overdrawn it actually costs you £35. With Metro Bank it will only cost you either £10 or £5. The same interest rate of 15% is charged on authorised borrowing and instant overdrafts.

How does your credit card work?

For existing customers we can offer a no-gimmicks, no-fees credit card. Purchases, cash advances and balance transfers are all fee-free.

The key difference for us is that the 13% rate is the same rate for everybody. We don’t do risk-based pricing, as it’s a concept that attempts to charge more to people who might perhaps struggle to pay off their credit, which seems counter-intuitive as it ends up creating more of a problem.

What we do is risk-based lending. Store managers are trained to make credit decisions – the end to ‘computer says no’. Everyone gets the same rate – what we’ll do is have the conversation about what’s the right credit limit to extend.

Are you going to sell payment protection insurance (PPI)?

No, we’re not. We won’t lend money to people that we don’t think are in a position to pay it back.

We have relationships with IFAs who are able to talk to customers about any protection needs they have, such as life protection or income protection. But there is certainly no need for our customers to take out protection [with Metro Bank] on any borrowing.

Are you going to offer investments? 

No, we’re not in the investment business. We are a traditional bank.

We do spend a lot of time trying to get children into the habit of saving. We do a lot of work in local schools with our mascot Metro Man.

In store, we have our ‘magic money machines’, which change coins for free. And kids can win prizes.

What plans do you have to expand?

We’re starting in Holborn, then opening in Earls Court/South Kensington in September, Kensington High Street later in the year, and Fulham Broadway and Borehamwood in October. We think there’s a real demand out there for a new bank. We’ve got another eight stores in the pipeline.

We want to be where people live and where they go to work, aiming for 200 stores in London. The 7-day banking model is well suited to city locations where there is that demand all through the week.

What link to you have to the Metro newspaper?

Metro Bank comes from the word ‘metropolis’. There is no relationship with the Metro newspaper, we are Metro Bank.

Banks have a bad reputation for complaints handling. What are you going to do to avoid this?

One of the biggest sources of dissatisfaction is that people can’t go into a branch here in the UK and expect their problem to be resolved. They’re always being passed from one department to another.

Our stores are very different. We put the equipment into our stores that enables the team there to service all of the customer’s needs. For example, we can print debit cards, credit cards and cheque books in the store.

We’re open twice as long as any other bank, so you can come in and see us. You know that the person you’re talking to is in a position to be able to help you.

We have a satisfaction guarantee that says if you’re not completely happy with our service, for a start we’ll say sorry. We’ll take down what we’ve done wrong, with a commitment to learn. And we’ll give you a tenner for the trouble.

We hope we’ll get a good reputation for dealing with complaints really well.

What are the three things that will make me switch to Metro Bank?

Customers tell us the reason they’re not switching is they believe that the main high street banks are all as bad as each other.

We talk about starting a revolution and joining a revolution. The most visible part of that is that you can open an account in 15 minutes. That you can walk out with your debit card and your cheque book.

It isn’t ‘computer says no’ – the person you’re talking to can make a lending decision based on who you are and what you’re trying to do with your money. You see us open early and open late, seven days a week. It’s a complete revolution in the way banks engage with their customers.

The fact that we’re engaging with children in schools and working with charities to play our part, will, I think, probably be the thing that over time will make customers want to vote with their feet. Banks should behave in a different way and this is the revolution that’s worth joining.

How do Metro Bank’s products compare?

We’ve reviewed Metro Bank’s products and compared them with the rest of the market. Read our news stories on Metro Bank’s savings accounts and Metro’s credit card and current accounts.

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