Can smaller banks worry the big boys?
A year has flown by since Metro Bank became the first new high-street bank in a century to open its doors. So, as one bank reaches a milestone, perhaps the others should take note?
Last July, Metro Bank cynics said it wouldn’t last because it couldn’t compete with the big banks. But, 12 months on, it’s still here, and claims to be growing faster than it ever expected.
Although it’s not quite shaken up the UK banking market in the way that some predicted, Metro appears to be having an impact in the handful of local London communities where it has set up shop.
Metro Bank has its fans
Local business owners have been one of its keenest advocates; attracted by its simple charging structures and longer opening hours. And the personal customers who have switched have been impressed by the speed with which accounts can be opened and the easy-to-understand terms and conditions.
However, Metro’s real chance to make an impact in the consumer banking market will come when it finally allows customers to open accounts online next year.
For the moment, you need to be living or working near to one of its eight branches in and around London for it to be worth considering. Alternatively, if you’re in the area, you can open an account at their branch and then manage your finances online.
Will you switch to a smaller bank?
Once Metro Bank’s accounts can be opened from anywhere, its combination of good customer service and simple financial products will provide a real challenge to the big five banks that currently control the UK market. Banks which continue to rely on complex products and customer inertia to swell their bottom line.
The introduction of Virgin Bank to the high street is also imminent, while Swedish group Handelsbanken has already opened 100 UK branches and promises to offer a fairer alternative to the current big players.
So the consumer banking revolution is hopefully just around the corner. But the newcomers will only be able to shake up our banking market if we are willing to given them our business. So will you take a chance on them, or do you feel more comfortable sticking with a big bank?
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