metro-bank-comment:-is-modern-banking-too-complex-for-challenger-banks?

Metro Bank comment: Is modern banking too complex for challenger banks?

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Much of Japan is in a state akin to ecstasy. The cause of this national celebration; a Sumo wrestler called Tokushoryu. 

To the shock of the established giants, this 29-stone (188kg)man-mountain just won the national Grand Tournament despite being the bottom-ranked sumo in the league. The nation’s response has been rapturous.

We all love a challenger. That’s why this paper has long supported Metro Bank. For decades, the bloated Big Five banks needed shaking up. Poor customer service, rip-off charges and bad behaviour in the financial crisis meant we needed a disruptor.

Metro seemed just the hero we needed. It gave us great customer service, bank branches that were open when we needed them, even an eccentric love of dogs. 

But while the customer experience was — is — brilliant, back in the engine room, Metro has made repeated mistakes. 

Now, on top of its disastrously botched reporting of its property liabilities, we learn it has breached sanctions on Iran and Cuba. 

Banks are totally paranoid about this stuff. Failure to carry out full “Know your customer” checks can result in mammoth fines. Metro is coy about how serious its systems failures were. But the impression you get is that in the dash to win new customers, corners have been cut that only came to light in later years. The fear is that providing finance these days is simply too complex to do without the deep pockets of the established giants.

Tokushoryu’s game plan was simple: “If I do my best on the opening charge, I can live with the results that follow.” That may work in sumo, but not in banking. 

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