Metro Bank continues its 'challenger' marketing

This post updates the preview and closer look at Metro Bank in Chapter 11

Metro Bank's marketing has, from its founding in 2010, encouraged customers to 'join the revolution'. This means, for example, an emphasis on retail hours that are convenient for customers, with lively and colourful branch interiors that have an attractive retail ambiance. It also means offering safety-deposit boxes when competitors are closing branches and eliminating boxes.

Despite intense competition, Metro Bank, as a challenger bank, has become profitable and is expanding its branch network, although a bit less aggressively than previously planned. The acquisition of a home loan portfolio is another way Metro Bank has added new customers in pursuit of growth. On the other hand, rising interest rates are putting pressure on profit margins.

Understanding that many customers want e-banking as well as retail banking services, Metro Bank has introduced a 'developer portal' for third-party developers who are creating apps to complement and enhance bank services.

At the same time, Metro Bank University is providing apprenticeship training to prepare new employees for delivering quality customer service in its busy branches--service that Metro Bank sees as being a differentiating factor in its competition for customers.

Which is the future of banking?

What is the future of banking? One bank marketing exec points out: 'if banks want to stay relevant, financial marketers need to stop selling and start problem-solving'.

So is the future of banking personalised customer service, a problem for many? Convenient service in neighborhood branches ('stores') has been fueling Metro Bank's UK growth since 2010. Metro Bank is poised for full-year profitability and has attracted 1 million customers with 48 branches.

As a 'challenger bank', Metro Bank is targeting individuals and businesses who aren't satisfied with the established banks. To induce switching, Metro Bank keeps its branches open 7 days, with extended hours for evening transactions. The branches look more like cheerful retail stores than stuffy banks. And it's connecting with customers on social media: Metro Bank has 13k Twitter followers and 24k LinkedIn followers.

Or is the future of banking in technology, speeding transactions without face-to-face service? Between more sophisticated cash machines and smartphone banking functionality, do customers want or need to visit a branch these days? Customer behaviour is shifting as more people adopt on-the-go banking using apps. Pockit is a startup financial services firm that offers app-based transactions such as remittances.

Sometimes cash is needed for everyday transactions. NCR, which makes video-capable ATMs, notes that such automation is 'a bank in a box', ideal for locations where a bank wants to serve its local customers, with or without a branch.

Inside the marketing plans of UK challenger banks

Challenger banks are recently-founded banks challenging the traditional UK high-street banks. As some high-street banks close branches and adapt IT systems to multichannel requirements, challengers begin with the latest technology and lessons learned by studying the established competitors.

Monzo is a challenger bank targeting digital-savvy customers. Originally named Mondo, Monzo operates no branches but instead delivers services electronically. Its marketing plan involves continuous customer input--asking for feedback on products for cocreation, and even soliciting ideas for the brand name Monzo. It hosts periodic get-togethers for customers to meet each other. 'People in corporates roll their eyes when startups talk about values and vision, but the brands who succeed are those who can define that for the people on the journey with them', says Monzo's head of marketing.


Another challenger is Metro Bank, founded by the experienced bank entrepreneur Vernon Hill, with retail branches that are open for extended hours every day of the week. Looking at the UK bank industry, he observes: 'There had been no entrepreneurial tradition in banking. Maybe there was 50-100 years ago, but there certainly hadn’t been one here for a long time'. So Metro bank's marketing plan is based on competing with convenience and friendly service, as well as multichannel marketing to allow customers to bank when and where they choose.

Also competing as a challenger bank is Atom Bank, which is digital-only, no branches. Its marketing plan relies on differentiation via customer focus. Customers can choose a personalised look for their Atom Bank app and even call the bank whatever they wish. Atom's CMO says: 'The traditional old banks constantly reference their relationship with its customers, but our brand strategy is about us helping people understand money much better'.