Analysts from Datamonitor not convinced by Metro Bank offer

Analysts from Datamonitor not convinced by Metro Bank offer

Metro Bank has today become the first bank to launch in the UK since 1872.

The bank said it further plans to open a further 10 stores in Greater London over the next two years as part of a 200-plus store expansion plan in addition to its first Holborn branch.

Craig Donaldson, chief executive officer at Metro Bank, stated: “Metro Bank will stand out from other High Street banks by providing unparalleled service, convenience and value for money.

“People’s lives have changed, great retailers have moved with them and banking should reflect that, so Metro Bank will be where customers work, where they live and where they shop at weekends.”

But, with its long opening hours, lack of internet banking options and low interest rates, Metro Bank is going to appeal to a very niche segment of the metropolitan population – those that work long hours, aren’t online at home and aren’t financially savvy or interested in getting a good deal on their savings, according to analyst firm, Datamonitor.

Gimmicks fail to impress

“This profile points towards the lower end of the mass market, where customers may not care so much about getting good value” said Datamonitor’s retail banking analyst, Jonathan MacDonald. “While gimmicks such as free ice cream, stilt-walkers and a three-piece brass section put a smile on the face of many passers by, one wonders how many financially savvy Londoners will be attracted by the rather uncompetitive rates on offer.”

Alex Kwiatkowski, financial services technology analyst at Ovum, added: “Metro bank seems to have made no attempt to reach affluent and aspirational audiences by providing an online banking service at launch, nor has it engaged with social media channels, despite them having the capability to do this and a brand message which implies creativity and innovation is core.

“The bankers may see such things as trivial, but surely not as trivial as dog-biscuits. Having a Twitter handle, for example, would have allowed the bank to engage directly with customers and potential customers in new and innovative ways, reinforcing their launch commitment of exceptional customer service.”

“Metro Bank does not have the muscle to overpower its far bigger rivals and should not attempt to slay Goliath. If it is to establish itself as a credible player it will need to rely on nimbleness, accuracy and the right ammunition. From Ovum’s perspective, it has yet to convincingly prove the existence of any of these elements.”