LONDON, England – I hardly go into my London bank branches. I don't even do much internet banking. Everything I do is through automatic debits and standing orders and automatic deposits. Then there is the occasional phone call. Britain's big banks have been shedding branches for this very reason. No surprise there.
So, why are there people wanting to start new banks and open new branches just after the worst banking crisis in decades?
On Thursday Metro Bank opened its first "store" (they like to call them that instead of branches) in central London.
Metro is based on the Commerce Bancorp model started in the United States in the early 1970s by founder Vernon Hill. He's also the man behind Metro and thinks Londoners want more branches (sorry, stores), longer hours and to be able to walk into the bank 7 days a week, 361 days a year (few 'bank' - aka public - holidays for his employees).
There are certainly some nice touches at the Holborn store; friendly staff, quick sign-ups for a new account, a coin-counting machine for the kids to put money into a new account and even hundreds of American-style safe deposit boxes. Hill told me one big advantage is that it doesn't have to deal with legacy technology.
More stores will open soon and they hope to have 200 in 10 years. Chairman Anthony Thomson says they want to grab 5 10 percent of London's banking market and says that would be enough to be lucrative.
People were lined up in front of the store before it opened and every teller was busy during the first few hours. People do seem to want a simple branch bank concept. But Metro does not appear to be trying to undercut the big boys – consumers groups have looked at the rates being charged for things like mortgages and credit cards and child accounts and while they are competitive, they are not priced to lure people in it seems. Its all about customer service.
Metro also promises to make loans to small and medium-sized companies near the stores.
Metro might have competition soon. Bank branches are being closed or sold off by state-owned Northern Rock, Lloyds and Santander and there is talk that other "community" banks will sprout up. Just when I got used to not finding a branch when I occasionally do need one.
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