Interview - Martyn Atkinson, Metro Bank’s Director of Digital and Change
- Summary:
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Launched in 2010, Metro Bank has put customer service and experience at the centre of what it does.
With such instability and hostility, you wouldn’t necessarily think it an opportune time to launch a new national bank. However, in 2010 Metro Bank saw a gap in the market for a bank that once again sat at the centre of the community, with both a high-street presence and an online experience that put the customer’s convenience first.
I myself am a Metro Bank customer, and I can confirm that it’s ethos isn’t all PR. Within an hour of walking into my local Metro Bank branch I was set up with a new bank account, with my debit card created on site, and my online and mobile banking all set up. What took Metro Bank an hour took my other banking provider around a week.
Speed and stellar customer service are what Metro Bank prides itself on - no matter what channel you’re using, online or offline.
I got the chance to sit down with Martyn Atkinson, Metro Bank’s Director of Digital and Change, to discuss the bank’s digital strategy and to get an understanding of how it plans to shape success going forward. Atkinson has worked for a number of the traditional lenders, and unlike some of these organisations, he says that Metro Bank’s focus on the customer isn’t an empty promise. Atkinson said:
I think one of the things that has made Metro Bank incredibly successful is the customer-centric and customer service ethos, and it bleeds throughout the organisation. The whole culture of the organization is that people genuinely want to do the right thing by customers. And I know that sounds slightly cliched, but having worked in a number of financial service organisations and it's the first time in an organization I can genuinely say it's not rhetoric. It's not culture written on their poster on the wall.
Considering Metro Bank was the first high-street bank to launch in the UK in over 150 years, it’s growth has been pretty incredible. Since 2010 it has grown to 46 local branches, now has over a million customers and it’ revenues are increasing by staggering amounts each year (especially when compared to others in the sector).
Given that many of the other high-street banks are slashing jobs and struggling to convince the market of future success - why does Metro Bank continue to impress? Atkinson said:
Metro Bank came along and the whole premise was about convenience, it was about putting customer centricity at the heart. And also, I think, going back to good old traditional community banking where the bank plays a genuine role in the community
I think it's a challenge for some of the bigger banks in the sense that they've got huge cost bases, which at the moment we don't because we don't have the size and scale of those banks. And in an industry that's become relatively saturated, and there's a genuine lack of probably movement between banks, what I think you're finding is that a lot of the banks are therefore looking at what levers they can push to make shareholder value and report back dividends and all that good stuff. And one of the things that they can therefore do is effectively strip out costs by removing people and automating processes.
I think there's always a very gentle balance between offering fantastic digital experiences that people want versus still having a face, time, and presence when people need you. And I think what Metro Bank has clocked is that actually it's the existence of both physical and digital that people want. It's the optionality rather than them being mandated to go to maybe the cheapest channel or the channel that's easy for the bank.
Digital investments
Atkinson explained that where a digital presence complements a physical presence is actually “where the magic happens”, which is why Metro Bank has this year been undergoing a major digital transformation across its core consumer facing channels. This will continue for the next 24 to 36 months and Atkinson said a “significant investment” has been signed off by the board, in order to make sure that Metro Bank doesn’t offer a two-tiered service between physical and digital. He said:
We want you to have an amazing experience independent of the channel that you choose, and you being the operative word.
The strategy itself has three core elements. The first is about ensuring that Metro Bank can offer the same consistent experience online as it can in-store, investing in a world-class internet and mobile banking experience.
The second part is ensuring that Metro Bank can grow the organisation, where it wants to decouple cost from growth. This is in recognition that the traditional banks have struggled to innovate because their cost base has grown in proportion with the income lines. According to Atkinson, this means:
What we need to make sure is that when we have digital experiences that those experiences for our consumers are genuinely straight through, that only a human in the back office would need to engage when there's an exception.
And thirdly, Metro Bank will invest in digital where it feels that it can provide a competitive differentiation/advantage - providing services that it thinks that customers need. Atkinson said:
Having worked in some of the major banks, they're relatively privileged in that if you think about the investment wheels of roulette table they're able to invest pretty much on every single segment on the roulette wheel, and therefore they can cover all their bases. As a result, there might be some costs in things that might not come to fruition or might not necessarily serve a market, but you almost need to just compete to stay relative to the Jones', so to speak.
I think at Metro what we're saying is we acknowledge and accept we don't have the levels of investment that some of the bigger banks do, and therefore it's really important that we apply discretion in judicious assessment of the things that we would invest in, and it's making sure that the things that we invest in are genuinely the things that our customers want.
We sit down on a monthly basis and talk to them, whether they're retail, whether they're business, and understand their pinch points rather than just doing an eclectical digital strategy of just, "We're literally going to do everything", because we simply can't afford to do that.
The right technology
Atkinson explained that Metro Bank has worked hard to ensure that it’s customer facing systems are loosely coupled from its core banking system - providing an abstraction layer that limits damage from any changes that are made at either end.
Metro Bank’s core banking system is Temenos T24 and then it uses a set of orchestration tools in terms of middleware that effectively allow it to disconnect the front end from the back end. Atkinson said:
And what that gives you is flexibility, agility, and speed. We've then got one of the, in my view, best in class core banking platforms in terms of Temenos. So what we end up doing is we build an architecture that's loosely coupled and really quick, but it's also best to breed.
However, aside from the systems, Metro Bank has also been working to build an internal digital capability that “transcends business and IT”. The team will consist of UX designers, creative designers, artistic directors and product owners, which will be able to take a request from the business and have it in production within a couple of weeks. Atkinson sees this as a “huge competitive advantage” going forward.
We've been working with an external supplier, who's a digital expert, and what we've said to them is, "Help us build a capability and the technical artifacts, but make sure that you leave with us the innate capability to then manage and monitor." The kind of analogy that the CTO uses, which I really like, is teach us to fish but leave the fishing rod as well.
What that now means is we've got not just a set of individuals that transcend business and IT, but I think the real beauty that we've got here is they all sit in one room, in one office location, three minutes walk from here. So when you've got a problem we don't really suffer from the organisational boundary issues, because from the front-end customer through to the backend developer they sit in one world with one methodology, with one master. And what you remove is the finger-pointing across - ‘change don't know what they're doing or the business haven't decided or IT are very quick, because they're all under my tutelage’.
I've worked at the bigger banks when you've got teams of 600 people, they're sat over seven or eight locations, even just orchestrating the conversation between risk, regulation, compliance, proposition, technology, that in itself can take a week. We had an issue earlier in the week where we couldn't quite decide on what it was that we were going to respond to a defect. Within minutes, we literally had compliance in the room with propositions, there's our three options. We'll do that one.
PSD2
One of the challenges currently facing Metro Bank, and the financial services industry at large, is the
EU directive PSD2, which enables banks to let third party providers manage their customers’ finances. This is an attempt by the EU to encourage greater competition in the industry, but banks are concerned because it could mean third party providers owning the relationship with the customer.
Atkinson said:
Firstly, I think it's the right thing to do to encourage competition. Metro Bank absolutely wants there to be more competition because it's the right thing for the consumer.
Where I think there's a risk is, I think there's a risk of disintermediation, so someone else comes in and acts as that go-between you and the end consumer. And I also think with it it then becomes security risks and concerns, because if there is an issue, if for example, you're engaging with FinTech "X" and you get hit with fraud, who's liable for that? I think the whole open banking is both a great opportunity, but also a great threat.
The key is for banks to create a stickiness with their customers, so that they continue to keep the relationship with them, as opposed to some other third party. Metro Bank is placing particular emphasis on its business banking customers, as this is an area it feels it can really differentiate from the rest of the market.
Metro Bank has a relationship with Xero and it hopes that it can utilise this, combined with a face-to-face relationship with business customers, to provide a personalised service. Atkinson said:
If you look at the business banking demographic, they are broadly time poor and kind of ambition hungry. They don't really want to be doing mundane banking bookkeeping. So where our thinking is starting to coalesce, is we have a business account proposition that is arguably the best on the high street. You can open an account, if you're really unlucky, in two hours. If you're really lucky, in about an hour to an hour and a half. It takes three to four weeks.
We’ve also got a relationship with Xero, where we give feeds into Xero for the customers that would want us to do that. If you're then starting to look at their kind of life-cycle management, how they do their books, how they do their financial returns to HMRC for tax, how they do payroll and accounting and do their balance sheet - we can't help but think if we're pounding the products and we've got the data that we are providing and consuming with other partners we can then start to provide more contextual real-time insight to go, "Okay, we've just finished your bookkeeping. We've just helped finish do your tax returns. We can see that you've got a £15,000 gap for the next three months. Here's a loan of £15,000 with these terms, and we know that you're approved for it because we've been able to look at your data and we've got your credit turnover."
So we absolutely don't want to get disintermediated. We think our model has proven that people want engagement with their banks, and for it to be a bit more personalized. We think in the business and commercial space there's real opportunity because the real magic sauce for us then is if you couple that with a business manager that knows you personally, he knows your business, you've then got the elegance of a technology platform that's complemented by the value and insight of a human being.
We think that that combination is hugely powerful. You can read industry studies, educational papers around AI, robotics, people who self-invest, for me the debates still out. People still like the comfort factor of speaking to someone about their financial, and particularly in the business and commercial space.