Metro Bank’s perks offering some paws for thought (From The Northern Echo)

Metro Bank’s perks offering some paws for thought

10:38am Tuesday 16th March 2010 in

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WHEN major household brands such as Virgin, Tesco and the Post Office said a few months ago that they wanted to launch current accounts, many customers at the big High Street banks imagined a new banking dawn was about to break.

It is not 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 1,000 more than Santander – the Spanish owner of Abbey, Alliance and Leicester and Bradford and 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 them.

US-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 this year, in central London, with further expansion in London.

Metro Bank will offer extended opening hours over seven days a week, online banking, a 24/7 customer call centre 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 water bowls and biscuits for customers’ dogs.

Metro Bank vice-chairman Vernon Hill said: “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.

“Even before we have seen any of its products, Metro Bank will have made competitors sit up and take notice; customer-friendly opening times, no ’stupid’ bank rules, instant issue of cashpoint and debit cards and so on, are all a refreshing take on how banking could and should be done.

“If Metro delivers on its pledges, it should be great for consumers who will benefit, as it raises the bar in terms of customer service, branch facilities and products.”

Metro Bank will not discuss its charges, but Virgin Money chief executive Jayne-Anne Gadhia is more forthcoming.

“Most people know there is no such thing as free banking,’’ she told The Sunday Times. ‘‘Banks have to cover the cost of free current accounts with hidden charges, such as overdraft fees.

‘‘We are definitely planning to charge for current accounts, and be transparent about it.”

If Virgin Money is right, the end of free current account banking – even for those who stay in credit – is not far off, bringing Britain in line with Europe.