New generation aims to challenge the ancient leviathans. Jeremy Gates reports
WHEN major household brands such as Virgin, Tesco and the Post Office said a few months ago that they wanted to launch their own current accounts, many customers at the big high street banks imagined a new banking dawn was about to break.
It isn’t only the cataclysmic losses in the meltdown of autumn 2008 – and the multi-million pound bonuses for bankers since – which have opened a huge gulf between established banks and their customers.
Figures from the Financial Ombudsman Service show more than 80,000 complaints were received in the second half of 2009 against financial services companies, with more than 20,000 of them against Lloyds Banking Group through its various brands – Lloyds TSB, Halifax and Bank of Scotland.
Royal Bank of Scotland (including NatWest) attracted nearly 5,000 complaints. That’s roughly a thousand more than Santander – the Spanish owner of Abbey, Alliance & Leicester and Bradford & Bingley.
Lloyds, in its defence, says it has more than 30 million customers, and will deal fairly and consistently with each complaint.
However, a new generation of banks aim to challenge the ancient leviathans.
American-owned Metro Bank has gained Financial Services Authority (FSA) approval to win the first full-service banking licence for a new high street bank since the 19th century.
The first two Metro Bank branches will open in the second quarter of 2010, in the Holborn and South Kensington districts of central London. Others will follow in Fulham Broadway and Borehamwood, Hertfordshire, and the network across Greater London should top 200 by 2020.
To “surprise and delight” each customer, Metro Bank will offer extended opening hours over seven days a week, online banking, a 24/7 customer call centre located in London, a rapid opening procedure to supply new credit and debit cards within 15 minutes in branch, free coin counting machines at every branch and even a welcome (water bowls and biscuits) for customers’ dogs.
Metro Bank vice-chairman Vernon Hill says: “At Metro Bank, the customer is king and our goal is to reinvent British banking by building fans, not customers.”
Clare Francis at Moneysupermarket.com says: “Metro Bank is promising a brand new take on retail banking.
