The challengers
The Virgin Group was a ‘disrupter’ brand, it aimed when it emerged in the mid-90s to be a ‘rebel’ and bring simplicity to the UK banking market. Virgin came to Australia in 2003 and, after several previous partnerships, it was subsequently taken over by the Bank of Queensland in 2013.
Tesco Bank also had its origins in the mid-90s and then after being in a joint venture with RBS, it became a wholly owned subsidiary of the retailer Tesco PLC in 2009. By 2013 it had 6.5 million customers and was offering savings, credit cards, personal loans, mortgages and general insurance products.
In the Australian market, both Coles and Woolworths sought to emulate Tesco by moving into the provision of a range of financial services products, some of which are provided by third parties, but marketed under the retailer’s brand.
Metro Bank was the first new UK ‘High Street’ bank in over 100 years, when it was launched in 2010, having been granted a license by the UK regulator, as part of the drive to introduce new competitors into the UK market.
Metro Bank promised to revolutionise the retail banking market by opening new ‘High Street’ branches, under banners such as ‘Open Longer, Every Day’. It initially offered savings products, credit cards, personal loans and mortgages, with personal assistance to customers in ‘switching’ their accounts from other providers. It claimed to be a disrupter, by promoting its focus on customers, with very high levels of service in branches and convenience.
The physical presence was important to Metro Bank and it claimed that originally 93 per cent of all new accounts were opened in its bank branches. Its goal was to reclaim the banking values of the past by focusing on developing personal relationships between its staff and their customers.
In Australia, the nearest current equivalent to Metro Bank is probably Judo Bank, who received their banking license from the Australian Prudential Regulation Authority (APRA) in April 2019. Their target market is small to medium-sized enterprises, in particular those with a turnover of up to $A20 million. To serve this market, Judo are recruiting bankers to build a relationship-based lending model, where each banker will have around 80 clients.
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