Metro Bank: Rethinking Private Banking with Old-Fashioned Relationship Management
Metro Bank is starting to become increasingly prominent on the UK high street. The bank is modest in its private banking offering, but is aiming to leverage its branch network to better serve wealthy clients. John Schaffer speaks with Metro Bank’s head of private banking, Julie Barnsley, to find out more
UK-headquartered Metro Bank prides itself on its branch network. The bank has opened 41 UK branches,
which it calls “stores”, since its 2010 launch, and plans to have around 120 branches by 2020.
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Julie Barnsley, head of private banking at Metro Bank, tells PBI that the bank’s business model is not revolutionary but all about “old-fashioned branch banking”.
Barnsley took on the role of head of private banking in 2015, but has been with Metro Bank since its launch. She previously held roles at Barclays and Bank of Scotland.
Metro Bank’s private banking business has taken somewhat of a back seat in comparison to its retail banking push. Although private banking services are technically available at all branches, the 22 private banking staff are all currently based at the bank’s London headquarters in Holborn. However, there are plans to add a number of private bankers to the bank’s new Chelsea branch in the coming months. Metro Bank has strategically kept its private banking arm compact, and not advertised it.
Barnsley tells PBI: “Not many people know about our private banking division. To a certain extent that’s deliberate as we don’t advertise. If we were to stick an advert in the Evening Standard on a Friday night and generate 3,000 enquiries by Monday morning, we wouldn’t be able to fulfil the level of service that we’d want to, as we’re still a relatively small organisation.
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However, Metro Bank is aiming to grow its private banking staff numbers from 22 to 35 by the end of 2017. In terms of recruiting new talent, the majority of private banking staff is hired from traditional private banks, and these new recruits often bring in a pool of clients with them.
Metro Bank’s private banking model does not include wealth management. In fact, Barnsley tells PBI that Metro Bank will “never do wealth management”.
In terms of differentiating itself from other competitors in the UK, Barnsley says that Metro Bank is catering for clients that traditional private banks are no longer interested in.
She says: “Some of the traditional private banks have been increasing their wealth criteria. They’re saying to clients who’ve maybe banked with them for 20-plus years: ‘you no longer meet our criteria’.
“So, in situations where these clients are looking for another home, they’ll come to us for the banking bit and they’ll use a wealth manager separately.”
The criteria for opening a private banking account with Metro Bank are earnings of £250,000 and a cash deposit of £250,000. Alternatively, clients are eligible for private banking services if they borrow £1m, which can include a mortgage.
Barnsley adds: “Our main benefit is that we’ve just kept it simple. We do operational current accounts, we do savings and reserve accounts, we do loans, mortgages, overdrafts and credit cards – and that’s pretty much our core offer across the bank.
“We have one other product, our Money Management account, where if customers have a diverse portfolio of equities managed by another investment house, we can lend up to 50% of the value on an overdraft basis – as long as we can take charge over the assets and receive a daily valuation of those assets.”
It’s all about high-touch personal banking services at Metro Bank, says Barnsley “A traditional private bank’s first question to a client would be: ‘How much investable wealth do you have?’ We don’t ask that. At Metro Bank we don’t do wealth or asset management. We stick to plain vanilla banking, delivered with exceptional service.
“It’s all about old fashioned relationship management – that’s our main differentiator.” Metro Bank has also teamed up with British wealth manager St James’s Place to offer a mortgage product for clients looking to support their children or grandchildren in buying their first home.
According to Barnsley, Metro Bank is continuing to look at ways in which the two companies can work together to offer joint-branded products.
The bank opened a new branch in April 2016 on the King’s Road in Chelsea – one of London’s most salubrious locations.
A private banking suite is currently being developed at the branch and will feature private banking staff, in a similar vein to the Holborn branch. Barnsley says that the Chelsea location is more suitable and discrete for Metro Bank’s high-profile clients:
“Right now, most of our private bankers are based in Holborn, and this is probably not the most convenient location for a lot of our TV personalities and successful sportspeople.
“The King’s Road private banking suite will be much more discrete. We have some parking spaces underneath and clients will come in through a side door, straight into the private banking suite.”
The bank’s focus on branches has further advantages as it offers a safety deposit box feature in all of its branches, which is particularly popular with private banking clients. This comes at a time when the majority of UK banks no longer offer a security box service.
Barnsley says that one of Metro Bank’s key differentiators is its speedy onboarding process. She notes that although private banking clients take longer to onboard due to more stringent due diligence requirements, the majority of clients will have an account set up within a day.
Barnsley credits the speed of service to Metro Bank’s use of Swiss vendor Temenos’s software systems.
Photos of clients are taken on a tablet, which are later used for authentication. Know-your-customer and anti-money-laundering checks are undertaken whilst the client is filling out the relevant forms.
Barnsley adds that using Temenos’s systems has been beneficial for the bank, allowing functionally to be added gradually as the bank attains more complex customers.
In terms of digital channels, Metro Bank’s offering for its private banking clients mirrors its offering for retail customers.
However, Barnsley informs that there are plans to add extra functionality for private clients, including a concierge service and airport lounge access via the mobile app.
