Kirsty MacArthur, head of private banking at Metro Bank, explains why this quirky new entrant into the UK private banking space is ready to take on the big boys with a consciously “back to basics” approach.

Kirsty MacArthur, head of private banking at Metro Bank, explains why this quirky new entrant into the UK private banking space is ready to take on the big boys with a consciously “back to basics” approach. This is the second part of a two-part feature, to read the first part click here.

In MacArthur’s view, clients are coming to Metro Bank because they are fed up with the bigger firms pushing investment products at them, and at the constant churn of bankers leaving for pastures new every couple of years. In MacArthur’s words, Metro Bank is “not trying to be anything other than a bank” and so it has no products to push, and, looking at the second issue, she does not expect banker churn to be an issue. For its employees, MacArthur believes that Metro Bank represents “a chance to be part of building something new” and it is the bank’s values and status as a “brand innovator” which attract its employees. As such, she is happy to give sole “ownership” of clients to the bankers in her team.

Taking what is in many ways a brave stance on what clients want, Metro Bank targeting “people who want a personal relationship with their bank, but not all the paraphernalia,” said MacArthur, alluding to the glitzy hospitality events which are the hallmark of private banks’ marketing efforts. Such add-ons are “something clients are willing to forego for simple good service where people are smiling and being helpful”, she continued. That said, Metro Bank does put on a select number of client events but these tend to be highly-focused on business-specific networking rather than glamour. For example, the bank recently laid on a private dinner to help its digital/media entrepreneurial clients build their contact books which was a great success, explained MacArthur. In her words, these events are “ad hoc, but ad hoc in a good way.”

Metro Bank is clearly convinced that clients will not miss top-level hospitality at sporting events and the like, and since the cost of these efforts is inevitably passed on to the end-consumer this seems like a plausible notion in today’s straitened times. She is also unconcerned by the relative narrowness of Metro Bank’s offering since she believes that “only a very small percentage of private banking clients use them for anything other than private banking.” It is discretion and personal service clients want from a private bank, not necessarily a raft of wealth management services, for that they tend to go elsewhere, MacArthur said.

Private banking perks

That’s not to say however that Metro Bank’s private banking clients don’t get special treatment in many ways. Here, the bank’s flexibility is a real bonus, says MacArthur. While she would like to see all private banking clients to have at least £1 million in combined assets going forward, at present there is no hard and fast minimum threshold and clients with their money tied up in operational businesses are more than welcome. Metro Bank “can look at the client’s situation as a whole” and focuses on solution-led lending rather than being product-led, she said. Her six-strong private banking team also has the flexibility to offer clients preferential deposit rates in some instances (she is targeting a roster of fifteen bankers in the mid-term).

Turning to the sources of Metro Bank’s private banking business, MacArthur explains that the advisory space is its “richest source of referrals” – a fact that does not surprise her as IFAs don’t see Metro Bank as the same kind of threat to their businesses as wealth managers who might attempt to poach clients. Therefore, paradoxically, not offering wealth management and tax advice has actually “opened up a lot of business opportunities for Metro Bank”, she continued. As might be expected, the links between Metro Bank’s private and corporate arms are also strong and “referrals go both ways.”

Another source of business, for which Metro Bank no doubt owes a lot to MacArthur’s personal network, are sports agents, who often want to find a private bank for a whole team. Here again, clients can be taken on even if they are not “big enough” yet, said MacArthur, and this is the case for all kinds of clients as long as an advisor deems the client important enough. “Metro Bank is a rising star of banking and I want to bank rising stars in all sectors,” she said.

Clear ambitions

Whether Metro Bank will prove to be a star of the UK private banking space over the long term remains to be seen, what it not in doubt is the clarity of MacArthur’s vision for how she wants the business to develop. “We’re approachable and unpretentious…we want to be an expert in the basics… we’re a small entrepreneurial start-up so we have to prove we can do that first,” she said.

As a whole, Metro Bank “wants to be London’s bank”, said MacArthur, and if the growth in its retail business is matched to any degree on the private banking side then the big players could really have something to fear from this undeniably cheery red and blue brand. Metro Bank is an attempt to create a financial services brand which is “both credible and quirky, and that’s something that’s never been tried before,” McArthur concludes. Being simultaneously both credible and quirky is certainly a difficult line to tread, particularly when it comes to the serious matter of people’s finances, but Metro Bank might just be the one to do it.