By Max Clarke
Vernon Hill, Co-founder and Vice Chairman, and Anthony Hill, Co-Founder and Chairman at Metro Bank, both today gave evidence to the Treasury Select Committee on Competition and Choice in Banking.
* Widespread dissatisfaction amongst consumers;
* UK banks have to push products and cut costs to make a profit;
* The FSA is, and should be, a barrier to entry to the banking.
Mr. Hill commented: “Metro Bank was asked to give evidence at today’s Treasury Select Committee meeting because it has a unique position as the first new High Street Bank to be regulated by the FSA, and open its doors for over 100 years.
“There is widespread dissatisfaction amongst consumers who haven’t been offered any real choice in the banking market for a long time — the High Street Banks are offering largely the same deal. UK banks have forced themselves into a corner by competing to offer high rates on deposits and low rates on loans. They then have to push products and cut the cost of running the banks (e.g. employing fewer people) in order to make a profit.
“At Metro Bank we believe the best way to grow a bank in the long term is to over invest in the running of the bank with more employees, longer opening hours and a focus on customer service. That way the business grows organically. Metro Bank relies on recommendations to grow our business.
“The cheque is not dying out because customers don’t want it. If consumers want to keep using cheques then Metro Bank is happy to facilitate this way of banking - we want to help our customers bank how and when they want.
“Our experience of the FSA approval process was very good, however we believe the FSA is, and should be, a barrier to entry to the banking market — consumers must be protected and the FSA is doing a stirling job to ensure new entrants prove themselves before they start trading. However, the FSA also has a responsibility to encourage new entrants. The industry needs more competition so consumers can have a real choice of who they choose to bank with.”
Vernon Hill was in a unique position to give evidence due to his experience working within both the British and US banking industry. Vernon is often credited with reinventing American banking, and is the founder and former Chairman and President of Commerce Bank which he founded in 1973 as a one-branch bank in metro Philadelphia with nine staff members and $1.5 million which grew into a 500 store bank with 15,000 employees and a market capitalization of $8.5billion.
Based on America’s most successful bank model, Metro Bank is revolutionising U.K. banking with a total focus on convenience and service, including 7 day branch banking.