In the UK, Banking Is A Nightmare For Consumers
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!
10 Responses to “In the UK, Banking Is A Nightmare For Consumers”
Very interesting and enlightening. The UK’s banks are fat and happy and given their lack of service must be a constraint on the economy.
And who knew Vernon had a Yorkshire Terrier.
Vernon and Tom….what a fascinating exchange between an entrepreneur and group of technocrats!
I applaud Vernon for saying the emperor has no clothes.
Jolly Good Show!!!
excellent read.
Tom–
Off topic, but i miss your periodic reports on such as First Marblehead and Primus. How about an update on those credits.
Thank you.
John Morris
Terrific interview. I look forward to Vernon Hill traking this bank public.
Thank you; looking forward to the IPO. Vernon was an incredible success in the USA and his thoughts on service delivery are worth reading.
This is wonderful news Tom——–especially for the Hill family! Perhaps ‘ole Vern can run Metro banks leases, services, etc, through firms that he, his family, and cronies have a “notable stake in”, just like he did here in the U.S. Don’t forget the wife: perhaps she can do the design work, for a million plus, as she did before those grumpy old regulators (Tom’ s Man of the Year) moved her off the gravy train. You have to admire their spunk though; get forced out of one industry for questionable practices, just move your scam overseas!
Glossed over is the simple fact that NIM in the old Commerce days was a product of a vastly different rate environment. With rates as they are, what sort of profit IS there from being the consumer-friendly bank and offering so many free services?
I agree completely that service is the key and a product-driven organization is ultimately doomed to mediocrity… but how do you keep adding value in a challenging rate environment?
Great article and testimony. It sounds like the British banking sector is even more screwed up than the U.S. system. I didn’t realize the level of un-satisfaction among banking customers. So how can I invest in Metro Bank? I was a happy investor in Commerce before the TD transaction.
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