July 29th, 2010
03:15 PM GMT
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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.

soundoff (8 Responses)
  1. pirate


    July 29, 2010 at 7:48 pm |
  2. Fellatius Pov

    I have no money so I am the bank!

    July 31, 2010 at 12:03 am |
  3. asad khan,karachi,pakistan

    No branches(sorry stores) are needed when all transactions can be on the internet.This is good albeit cyber crimes.in third world countries like pakistan where banks are used as instruments of political harrassment and where people are forced to have photo accounts,are not more brances necessary.

    August 4, 2010 at 1:01 pm |
  4. David Ryan

    Who wouldn't want to start up a new Bank? If you have the capital I would say go right ahead and do it.

    So long as you are responsible there is a lot of money to be made, and if your not responsible don't worry.

    National Governments (Pretty much every country on the planet), Central Banks (UK, Ireland, US Fed etc), Regional Banks (ECB), International Institutions (IMF) will all clamber to bail you out of trouble in the name of free market capitalism and a need to get capital flowing through the economy that will encourage further investment and lead us to the Holy grail that is a few cents (Euro and Dollar) more than what we have now.

    This inturn will create employment leading to the x-factor etc etc etc

    With no one asking the really obvious question, Where is the money coming from??

    So while it seems we can't print money (Only CBs and Govts can do that) – as the owner of a Bank you can "Make up pretend money" that you don't have yet but you can still lend it out!!

    Actually, I might open my own Bank!! But I have one issue – "You need money to make money"

    August 11, 2010 at 6:10 pm |
  5. Veronica de Rothschild

    Because of my name. Lol.

    August 18, 2010 at 4:54 pm |
  6. bachtiar killo

    I want to get information of starting business without money if this is possible on yous services?

    August 19, 2010 at 3:38 am |
  7. Jessica Abigail Murway

    I truly feel we are getting to the core of what banking is all about...communities. When more branches are created more jobs are created when more jobs are created... (Money multiplier effect applies here) more lending, more homes, more small business' etc etc. Recall it's a wonderful life well, let’s just say the closer we get to the communal fundamentals of Baily Banks & Briddle in the height of this downfall & debacle of lending and without any hopes of most paying back (i.e. wasted tax dollars)... community development is where the core fundamentals need to remain.

    Lending and knowledge creation within a sample community and applying a community based consumer service model at its core...your truly structuring a win win that encapsulates the true reason banking was created in the first place...way to set the standard! I am quite sure this competitive advantage model will get them the increased market share they so desperately seek and need in these trying times for many…However, only time will tell....

    September 29, 2010 at 10:15 pm |
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