The personal touch – the success of Metro Bank

24 June 2016

With bank branches closing throughout Europe, what is the secret to the success of Metro Bank and its continued openings? James Lawson talks to Paul Riseborough, the bank’s chief commercial officer, to find out if satisfaction rates really are a bank’s best currency.

When it launched in 2010, Metro Bank was the UK's first new high-street bank in over 100 years. Since then, it has grown rapidly at the expense of the traditional high-street heavyweights. How has that happened? Through an excellent customer experience.

"Over the past 20 years in the banking industry, the desire to cut down on costs means service has deteriorated," says Paul Riseborough, Metro's chief commercial officer. "Service is at the core of our model and at the heart of the banking experience we provide."

Metro's laser-like focus on customer service and convenience starts with branches that stay open seven days a week. There's no need to make an appointment to open an account either. Staff can print a new debit card and chequebook, and set up internet banking on the spot. In 20 minutes, new customers are back on the street ready to go with a fully functioning card and account.

As its rivals have closed many of their branches while nudging customers to low-cost online channels, Metro has been opening new outlets almost as quickly. Inside, there are coin counters, baby-changing facilities and even free dog food.

"You can bring your dog, your cat or your bike in; it doesn't matter," laughs Riseborough. "It's about being convenient in our customers' busy lives and our bank managers' role is to be embedded in the local community."

Think local, act global

Each store adopts a local charity or cause and, with larger branches than normal in the industry, Metro welcomes local groups and charities that can use the space to hold meetings and events. The bank's 'Magic Money 5 for 5 Club' encourages child saving, while the 'Money Zone' schools outreach programme teaches children the fundamentals of money and supports the national curriculum.

It is Metro co-founder Vernon Hill's hugely successful US operation Commerce Bank that provides the template. Metro's service-based culture comes straight from the proven Commerce Bank playbook; one that takes inspiration from fast food outlets like McDonald's and Burger King. Founded in 1973, Commerce Bank grew to 500 outlets and was sold in 2008 for $8.5 billion.

The Metro experience is certainly much closer to retail than the traditional banking model. A small but telling detail is that it describes its branches as stores. Riseborough cites brands like John Lewis as exemplars for how to deliver an excellent customer experience across channels.

"When you talk to a John Lewis colleague, you know that they are going to be trained; that they will know what they are talking about; and that there will be a consistently high level of service," says Riseborough. "That's the bar that we set ourselves."

A friendly face

Staff are seen as critical enablers when it comes to competing on customer experience. Apparently, 3,500 people were interviewed for its first 60 customer-facing posts. Where possible, Metro Bank recruits via its own employees' referrals and prefers to promote from within.

Every new staff member goes through the 'Visions' induction course that initiates them into Metro's customer service philosophy that's encapsulated in the AMAZE acronym. After induction, the Metro Bank University (MBU) kicks in with a combination of computer-based and classroom learning. Metro maps out various career paths and then links them to the MBU courses that teach the required skills.

Unlike established UK retail banks of which the product-focused legacy systems resemble a patchwork quilt, Metro was able to start with a completely new, customer-centric system.

"There are hundreds of possible modules from how to present better to empathising with customers," explains Riseborough. "We are growing so quickly; there are loads of opportunities. If you want to start in the store and end up as a commercial lender, there's a pathway to do that."

Building trusting relationships with consumer and business customers alike extends to Metro's banking model, product range and marketing strategy. It has a conservative approach to lending, setting a maximum limit of 80% of deposits and eschewing wholesale funding markets.

Its current account has no fee but pays no interest. Instead, there are free European card transactions. There's no teaser rates for new customers either. Metro's savings products have flat interest rates and there are fixed fees for its loans and mortgages.

"You don't want to have to check your statement every five minutes in case the bank has cut your rate," says Riseborough. "We're determinedly unexciting in some ways. Of course we understand the profitability of different product sets and so on but the point is that isn't the way we manage the business."

He describes this as "looking at things on a total bank basis". So a child savings product may be unprofitable but the customers that use it will hopefully stay with Metro for a lifetime.

Hearing nothing but good things

Metro advertises little, preferring PR and word of mouth. Here again, trust, transparency and great service are the endlessly reinforced brand messages. For example, its one-size-fits-all interest rates are presented as the 'Savings Promise': variable rate savings customers know they will always be on the best rate Metro has available.

Although cross selling to maximise customer value has long been a central plank of retail banking business strategy, this is completely off the menu here. In fact, the Metro customer experience demands no product offers to customers at all, either in branch, via text, email, in apps or on the web.

"Our communications let you know about a new feature on the mobile app or if a new store is opening nearby," says Riseborough. "It's never about the next best product. There's no pop-ups, no interstitials trying to get you to take this or that savings account in our internet banking. Some banks even place product offers within your current account view, which is rather ghastly."

So rather than sales targets, customer service is the most prominent feature of employees' quarterly appraisals, with a customer satisfaction-related bonus paid annually. Metrics like a branch's Net Promoter Score feed into this process and also into Metro's

'Voice of the Customer' programme, which is used to judge branch performance along with research panels and mystery shopping.
"Most customers will receive a survey asking about their experience," relates Riseborough. "Our Net Promotor Score for account opening is around 80, which leads the market. We measure that every single day for every store."

A winning system

The latest systems, data and analytics underpin this process, along with the rest of the multichannel experience. Unlike established UK retail banks of which the product-focused legacy systems resemble a patchwork quilt, Metro was able to start with a completely new, customer-centric system.

Its core banking platform is Temenos T24, of which the 'software as a service' delivery model helped reduce start-up costs to a minimum. T24 provides a real-time single customer view and acts as a hub for every other major system from internet banking to mobile apps to in-branch card printing. One of the most important is Microsoft Dynamics CRM, which acts as a front end to the single customer view (SCV) to provide the context for branch and contact centre interactions.

The infrastructure also helps staff push any social or other queries they can't deal with themselves to the relevant specialist support team or branch. Staff can use the Yammer b2b social collaboration tool to answer questions communally or query the internal Parature-based 'Metropaedia' knowledgebase. MS Dynamics Marketing handles any outbound communications, recording them at customer level on the SCV.

"Our systems provide a genuine SCV, which is a key enabler," says Riseborough. "If you ring other banks and want to talk about multiple products, you will often be passed around the business looking for the right person to talk to. Our colleagues will have all the information on all your products and notes on your latest interaction on a single screen in front of them."

Social ambassador

Metro monitors relevant social media, with specialist social-media agents in the contact centre reacting to tweets and posts. Social interactions are again recorded at an individual level within MS CRM and synchronised back to the SCV. Information drawn from social monitoring and sentiment analysis also contributes to the Voice of the Customer programme.

This potent mixture of service and technology continues to power stellar growth. Metro's Q2 2015 figures saw deposits and loans nearly double year-on-year with just under 50,000 new customer accounts opened - a record quarterly increase of 10%.

New stores opened in Tunbridge Wells and Harrow, taking the total number to 36 and further openings are planned in Southall, Newbury and Maidstone towards the end of the year. Metro continues to innovate, most recently forming partnerships with Xero and KPMG Small Business Accounting to offer SME customers access to online accounting software, expert advice and other B2B services.

As it grows, can Metro keep delivering an excellent experience? "We have grown really quickly and the challenge is maintaining that culture as you bring on more than 100 new staff a month," says Riseborough. "The customer experience has to feel as good in our 38th store as it did in our first."

The other larger question is whether competing on trust, service and convenience is a sustainable model in the long term. It worked in the US for Commerce Bank but do today's customers still value branch service over online convenience and seductively high interest rates? After all, branch use is falling steadily in Europe and the US.

Other challenger banks like Shawbrook and Aldermore are also growing fast and successfully differentiating themselves from the 'big five' but none have adopted the service-led business model to the same extent. But Metro's success certainly has the incumbents worried, with the likes of Barclays investing heavily in redesigning its branch layouts.

Trying to improve branch service is an option but whether any of them can truly manage to match Metro's offering remains to be seen. As Commerce Bank's Vernon Hill puts it, "The big banks can imitate our model, but they can't copy it."