Banking on growth the Metro Bank way

Stefan Stern
10 August 2015

I am pleased to see Vernon Hill's Metro Bank getting attention. It looks and feels like the first real challenger bank to make a difference. Not before time.

I met Hill this summer at Cass Business School’s London symposium. He made a great impression with his straight talk and lucidity. These qualities come through in his book Fans! Not customers: How to create growth companies in a no growth world.

I particularly like the way he takes on what he sees as myths and attempts to bust them. For example: “No-one switches bank accounts”. “It must be true,” Hill writes, “because I read it in a London newspaper… but it’s not... We’re opening up so many new accounts, it’s crazy.”

Or: “A bank can only make money by cutting costs” – “Of course not!”, Hill says. “Cost-cutting, in my view, is the road to extinction.”

Or: “The branch is dead” – “No way, no how,” Hill says. “Retail customers want the best in every delivery channel and they want to choose those channels every day. Our stores are our lifelines to our customers.”

The best business leaders are often great simplifiers. They grasp all the complexities but make life easier for their customers and their staff. Hill is an enemy of stupid rules and encourages his staff to deal with customers’ questions there and then.

Greg Dyke was teased, when at the BBC, for saying that he wanted to “cut the crap”. But he had a point. There are too many ‘business prevention units’, especially in larger organisations – too much bureaucracy. Listening to customers and trying to keep them happy – turning them into fans – is a brilliantly simple idea but one that most businesses fail to achieve.

We will see if Metro Bank can pull it off.

Sir Howard Davies is a clever man and if he says London Heathrow is the best option for airport expansion then that opinion has to be taken seriously.

It is our one true hub airport, the airlines like it, it is good for freight and has international recognition.

However, having chaired a debate on this topic for the Management Consultancies Association recently I have to wonder whether it really is the best option after all.

For one thing, poor air quality and noise pollution are already way over the limits of what should be acceptable. A third runway at Heathrow would, it is suggested, require major tunnelling of the M25, taking perhaps five years to complete at unknown cost, generating tonnes of debris to be stored in landfill... somewhere. This could be both enormously disruptive and expensive.

If you look at the south east of England as a whole there are in fact several functioning airports: Gatwick, Stansted, Luton, City, as well as Heathrow.

It might be cheaper and quicker to add capacity in the other four locations, while also improving transport links. Heathrow is full, for sure. But maybe we should build elsewhere.

Or go by train. Or just stay at home.

☛ Stefan Stern is visiting professor of management practice at Cass Business School

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