In London last month, Vernon and a colleague, Metro Bank Chairman Anthony Thomson, testified before a Parliamentary committee that’s looking into the state of competition in the banking sector in the UK. Vernon’s Metro Bank, recall, is the first banking startup in the UK (a market dominated by five huge institutions) in more than a century-and has been a big hit with consumers there from the moment the first branch opened last July. Given what Vernon and Thomson told the committee about how UK banking operates, it’s not guard to see why. For instance:
– UK consumers seem to truly loathe the incumbents. The “Net Promoter Scores” of several large British banks aren’t merely low; in some cases they’re actually negative. It’s a situation Vernon said he’d never encountered before.
– Small businesses in the UK have long since given up looking to banks actually provide them with credit. They’re happy enough if the banks deign to let them open checking accounts and then ignore them.
– Banks’ reporting practices and requirements are so non-consumer-oriented that the big banks aren’t even able to report their deposits by branch.
In all, it’s an edifying, eye-opening read on the state of consumer banking in the UK. For all the sorry details, click here.
What do you think? Let me know!