Disruption in banking - newcomer Metro Bank puts culture at the heart of its business

Written by
Sarah Wild

11 Apr 2019

11 Apr 2019 • by Sarah Wild

“Retailers close 14 shops a day, with openings down by a third,” screamed the headlines, as a study of 500 high streets by PwC and the Local Data Company found that 2,692 stores had vanished in the first six months of 2018.

Separate research by Consumer Intelligence suggested the death of the high street is being fast-tracked by the growing tide of bank branch closures. An astonishing two-thirds have closed over the past 30 years, reducing once-bustling shopping streets to ghost towns as locals have less reason to visit, and undermining access to financial services for older and vulnerable people.

Disruptive newcomer

Stepping into the breach is disruptive newcomer Metro Bank, founded in 2010. Stubbornly opening, rather than closing, branches, it puts its emphasis squarely on providing outstanding customer service.

Its ‘stores’ open seven days a week (8am-8pm on weekdays) and are designed to be welcoming, complete with customer toilets and baby-changing facilities, free coin-counting machines, safedeposit boxes and even biscuits and water bowls for man’s best friend. Branches can be used for a variety of community and networking events.

Times are tough in the shadow of Brexit, but despite profit warnings in January, Metro Bank appears bullish, adding to its network of UK branches and committing to “making a difference and delivering a different type of banking for Britain”.

“Society needs banking,” asserts Metro Bank chief people officer Danielle Harmer. “The high street can add value to life. There are digital-only players in the market, but our view is that you need the physical and the digital: bricks and clicks, the two together.

“Most banks are pushing customers away from their branches because it’s less expensive for them if you use the ATM and the phone and mobile app. What we’re saying is ‘deal with us however you find easiest’; people want different levels of support and ways of interacting for different transactions.”

While other banks are burdened by legacy branches and technology, Metro Bank has the luxury of “starting at zero stores and bringing it up to what we think is a reasonable level” and introducing new systems.

For example, its cashiers can get accounts up-and-running immediately, explains Harmer: “Other banks don’t have the tech to do that; you’re waiting five days for the card; the pin arrives separately. Most of our processing is done front end and immediately.”

Experiential retail banking

A “relentless customer focus” makes sense both for society and business, she explains.

“If we provide you with exceptional service, you’re going to come to us, stay with us, tell your friends and family to join us; and we don’t have to pay crazy headline teaser rates, bonuses, or advertise. It creates a different relationship, moving away from being totally transactional to experiential retail.”

Rather than staff measuring success against sales targets, their goal is to “surprise and delight”, creating “fans” out of customers.

“What behaviours do sales targets drive and are they the interests of the customer and the relationship? No. Then take them out,” says Harmer. “We’ve never had product sales targets for the stores.”

Different drivers require different staff characteristics and behaviours, she explains. “We are transparent about who we are and what we stand for; people who wouldn’t fit tend to self-select out. If somebody comes for interview, talking about ‘smashing sales targets and being top of the league’, we’re going to ask them ‘could you tell us about a time that you’ve surprised and delighted a customer?’ and they’ll probably look at us blankly.”

As long as they are “smart and smiley”, new hires can be shaped in the company’s image, “but we still haven’t been around long enough to grow enough experienced commercial bankers,” acknowledges Harmer.

“If you want different, you have to be different,” she maintains. “So if you join us, whatever the role it is, the first two days are our visions cultural training.”

This involves learning about teamwork and the organisation – not to mention taking part in Metro Bank’s “legendary conga”, where new starters come up with a chant, dress up (“think Brazilian carnival”) and dance around the building, to applause from existing staff.

Culture as customer experience

“We do lots of other things too, such wearing red on Fridays; we celebrate stores’ birthdays,” continues Harmer. “We understand how important culture is. Because if you think about great service experiences you’ve had, it will be how the person who was serving you behaved. Culture is just behaviour, right? It’s made up of a million little things.”

The company is “fanatical about describing culture”, she explains. “We focus on behaviours first and reinforce it through language. For example, we don’t have appraisals, we have ‘amazing reviews’. When we do store openings, we chant our ‘amazing behaviours’.

“If you believe that culture is customer experience, then what we do is quite obvious. You don’t need separate employee and customer experiences. I can only be one person, and the more you ask me to be someone different at work, the more confusing it is. We say to people: ‘we’ll create an environment where you can be your best; just focus on creating ‘fans’.”

Role-modelling by senior leaders is clearly integral to achieving this.

“You can’t talk about culture, you have to be culture,” says Harmer. “It’s the small things, like courtesy… you can’t say ‘we’re polite, warm and friendly’ and be something different. You have to be thoughtful about the impact you’re having as a leader.”

Voted “most people-focused CEO” last year by HR magazine, Metro Bank’s chief executive Craig Donaldson embodies this behaviour. Harmer praises his listening skills and avoidance of blame culture. “I’m never worried about defending a situation, just about continually making it better,” she says. “All the irritating phrases like ‘tone from the top’ are bang on. You feel Craig’s presence and behaviour in the bank.”

Throughout the organisation, staff feel empowered to take the initiative to “surprise and delight”, sharing positive stories via Yammer. Each branch is run by a local bank manager, able to make lending decisions on an individual basis.

Meanwhile, to gauge the real experiences of her staff, Harmer monitors feedback website Glassdoor, replying to reviews personally and taking on board all comments. “If someone’s not happy, usually there’s some truth in it,” she admits. “You have to take a deep breath, suck it up and say ‘what is there here for us to learn?’”

She stresses that feedback is plentiful and ongoing for all at Metro Bank. “I say to people joining ‘you have to be very happy to get a lot of feedback, take it and do things with it. Nobody’s pointing the finger’.”

Maintaining culture during growth

With culture being Metro Bank’s “most precious thing”, the challenge is not to maintain it but to strengthen it, admits Harmer. “To get Craig to be that for nearly 4,000 people is too much. We need everybody to be the culture.”

Part of her team’s role lies in “systemising” culture to ensure it is widely understood and permeates the organisation. Onboarding for staff should be as friction-less as it is for customers to open an account.

“Joiners often say ‘it’s amazing, I’ve got my contract on my phone and returned paperwork digitally; I got my ticket for visions and sweets in the post; the day after I attended visions I got my laptop – everything worked. All the stuff that makes life hard when you join an organisation, the teams have pulled out, because they’ve listened and looked at data to find out what causes problems.”

Data is a key HR tool, Harmer adds, enabling the function to be proactive and strategic: “What’s the data telling us, where are the issues, what should we be focusing on? We look at Glassdoor, attrition and sickness data, exit surveys, the length of service in particular stores.

“Are people leaving because there isn’t a career path? Fine, engage with the university. That’s how we’ve ended up with our professional banking qualifications for entry-level advisory roles; we’ve also got an MSc in retail and digital banking with Cranfield.”

However, she is confident that most people “love what we’re doing, and being part of the community within Metro Bank”, taking a personal pride in schemes such as the Money Zone in-store education programme for kids, and the opportunity to take a day each year to volunteer.

To boost inclusion there are three network employer resource groups: Mpride (for the LGBT+ community); Mbrace (minority ethnic) and WOW (Women on Work). “They face internally and externally to varying degrees,” says Harmer, with speakers invited in to talk on related subjects.

“Our staff are incredibly curious and love storytelling; they come in droves. If you want people to be happy, you have to create a safe environment where they understand that we care about them. And yes, we are a business. But why can’t you be a business and care about your people?” she concludes.