Wenn Townsend Finance Lunch with Metro Bank

In the second of a series of debates with leading Oxfordshire accountancy firm, Wenn Townsend, representatives from Oxfordshire’s business community met at Wenn Townsend’s central Oxford offices to find out more about Metro Bank’s approach to lending, access and security

In attendance were the following:

Tony Haines Partner, Wenn Townsend
Wenn Townsend (WT) prides itself on a proactive and efficient approach to assisting clients with their accounting and taxation queries. With over 140 years’ experience as a firm WT combine traditional methods with up-to-date technological expertise, meaning that they are are able to offer services of the highest quality.

Ashley Keen Local Director and
Grant Shergold Local Business Manager, Metro Bank
Metro Bank are Britain’s first new High Street Bank in over 100 years, offering unparalleled levels of service and convenience, delivering the best of every channel.

Nina Robinson Finance & Commercial Director, ucisa
ucisa, a Charity, is a membership organisation for IT Directors and staff from universities and colleges internationally.

Frank Webster Director, FC Webster Consultancy
Frank has more than 35 years experience in the Real Estate industry. Formerly part of the original multi-award winning team at Finders Keepers Ltd one of the leading property companies in the UK (acquired by Countrywide PLC).

Joseph Garbett Director, Garbott
Garbott are high end, technical web developers who deliver complex web solutions through to apps, widgets, tools and website platforms.

Peter Fry Partner, leads Oxford Commercial Valuation Team, Carter Jonas
RICS Registered Valuer providing valuation, lease advisory and strategic property advice throughout the Thames Valley and South East of England.

Richard Rosser CEO, B4
As Oxfordshire’s leading networking organisation, B4 has a growing network representing businesses of all sizes and from all sectors. B4 also manages Oxfordshire Voice, Business in Oxford and NXT.
The discussion started with Nina Robinson of ucisa explaining some of the challenges she faced when trying to complete relatively simple procedures with the company’s bank.

Nina: We don’t have borrowings yet we have had a difficult relationship with our bank. The banks are conscious of good governance but our experience is that they are ill equipped to implement it – they are driven by forms and their client-facing staff relevant to the process lack an understanding of the purpose of the information they are seeking. We are governed by a board of trustees and we can go up to 11 trustees but had 5 to start with. We wanted to add 2 more – it wasn’t an issue with Companies House or the Charities Commission, yet it was with the bank. The bank demanded the information that had already been lodged at Companies House, insisted that this was inserted into their paper form and would only accept the form signed by several trustees, located in different parts of the UK, with a short deadline to submission of the completed form.

As we didn’t comply within the deadline, the bank froze the corporate bank account which, in our opinion, is holding a business to ransom. The bank wouldn’t allow us access to operate our account holding OUR money. The relationship manager was ultimately helpful and lifted the ban on the trading company so we could pay our suppliers.

Subsequently, the Relationship Manager (RM) visited us with his Line Manager and apologised and refunded the bank charges for the past 18 months by way of apology.

Joseph: Our bankers were recommended to us by Wenn Townsend (WT). Everything was fine until we wanted to buy another business. Initially, the comment was ‘this is no problem’ and we were under the impression that we would sort this out in less than two months – it took a lot longer.

We would get through one hoop and then another one would appear. It was very wearing but we eventually got there.

Tony: Would you expect those questions to have been asked in the first place?

Joseph: If I had known the path we were taking from the outset then we could have prepared our solicitors, myself and the vendor much better. It did feel that there was an inner business of the bank which treats the RM’s that customers deal with as a completely separate business. We almost missed our deadline which was a key reason for acquiring the company – Black Friday. I like their banking service, but the loan process was protracted to say the least and unnecessarily so. Communication was poor.

Tony: A bad reflection on us for recommending the bank to you?

Joseph: WT can do no wrong in my eyes – it’s not a bad reflection on WT.

Tony: But it’s a reputational risk against us and could jeopardise our relationship with you.

Joseph: Potentially, but as I say, it’s like we were dealing with two banks – our RM and then the inner sanctum which we couldn’t directly deal with and which was ringfenced by a wall of steel.

Nina: Our troubles with our bank started when my name had to added to the list of signatories on the bank account – this took over 8 months to get through. We had to ask for the RM to change and that process took an excessively long time. Had we known that WT recommended the bank to us, we would have complained to WT as it reflects badly on you. Now we have a good relationship with the bank as we don’t need them to do anything.

Tony: I have a client that has dealt with the same bank for a number of years. He spoke to me yesterday and said the bank wants the last three years of accounts – they have the last two. His RM had moved on and he now deals with someone in Glasgow which he is not happy about. Essentially, he was being asked to supply information they had and couldn’t, it seemed, be bothered to seek out. He was also very unhappy that he no longer had a face to face RM and I told him that this centralisation was part and parcel of how the banks are going.

Nina: Perhaps we could offer confidence to the RMs through B4 Magazine to enter into discussions that we are now having.

Tony: Providing the RM’s aren’t all based in Glasgow!

Nina: The banks need someone locally to provide a seamless service to their clients. A call centre is fine for some tasks but sometimes a business may need personal attention.

Tony: Another client of mine had a lot of EU funded projects and he went around the world setting up game reserves in Africa, South America, Asia etc…. He had one grant which proved particularly problematic. He got paid an advance to start the work, went to the bank to take out the money which the bank put straight on deposit and told him if he wanted it he would have to borrow it! So he had to do that at considerable expense.

He had to go to the country he was setting up the reserve in for which he had funding to do a site visit. He was there for two weeks and had to pay for his two week hotel stay on the company credit card, which had the funds. It was declined because it was a black listed country. Not only that but the bank said they were no longer doing business with him which killed his business.

Ashley: That is a treating customers fairly issue and that certainly doesn’t sound fair to me. The list of sanctioned countries changes so regularly.

Tony: Would you expect the bank to say we don’t want you as a client anymore?

Grant: We do have sections of our account opening forms which ask if overseas trade will take place and at what level to ensure there are no surprises.

Ashley: I am Director of Metro Bank (MB) here in Oxford and Grant is the Local Business Manager. I have been at Lloyds and Santander and Grant has been at Nat West. We can certainly tell you how MB are trying to buck the trend and do things differently.

Grant: We are very customer facing – a strong High Street presence. We are a very new bank – established in the summer of 2010 – and our founder, Vernon Hill, spotted that all of the established banks were moving away from the High Street and felt this was not the right move to make.

Tony: When you get new businesses joining you, do you ask why they are joining you?

Ashley: Yes there is a lot of discontent with the established banks and a decline in the quality of service so we are benefiting massively from this.

Tony: You aren’t here to answer why the banks have changed how they operate but there is a growing discontent with how banks treat their clients. Lloyds RM’s are in Glasgow now!

Ashley: There used to be a Lloyds team in Oxford which I was part of and I moved because I wanted to be working with customers, not at arms length. I wanted to be part of community banking, not in a call centre. We will take any business from a start up to large established businesses and we will assist them with all of their requirements.

The stores are set up to service the customers – open until 8pm, Bank Holidays, weekends. It’s a very modern look at Metro but it’s an old fashioned banking approach and it works. We do everything you would expect a traditional High Street bank would do – or would have done. We don’t get involved in insurance and the peripheral services, it’s core banking services which the mainstream customers want. We have 63 stores now with local decision makers. We have gone from being a London bank to being a southern region bank and have plans to have nationwide coverage by 2022.

Tony: Where does the decision for lending stop?

Ashley: We have credit decision makers in Reading and they will look at facilities up to £4 million – it’s a more joined up process than any other bank I have worked with. It’s significantly more timely decision making. If we can’t do the deal we won’t string out the response.

Grant: We had someone walk in to the branch this morning and I got Ashley involved and we will send out a proposal this afternoon when we get back to the office and Reading will then get involved and the process will already be some way down the line.

Ashley: It’s a very difficult backdrop for everyone in the world at the moment and the bank has to consider all factors when loans are made which is normal in all banks. My experience is that in the 3 ½ years I have been at Metro, once we have credit on board and we have committed to doing something, it’s very rare this doesn’t go through. We do a lot of fact finding from the outset and it’s a generally more refreshing approach.

Frank: I bumped into Grant recently – I knew him when I was at Finders Keepers. I have moved to Metro and I am introducing a lot of people to Metro. I think there is a lot of synergy between banks and estate agents…our cycles are @5 years behind banks. So I want to work with organisations that are forward thinking and ahead of the curve and I feel that Metro, with their refreshing approach, are just that.

Many my clients are right for Metro and I am keen to see how you could help them.

Grant: Since we opened in September we have opened over 1200 personal accounts and 124 business accounts. Put that in context against the 12 business accounts that I was tasked with opening when I was at RBS.

Tony: Moving banks is such a pain and I think most of us would move tomorrow if we could.

Nina: We certainly would.

Frank: These guys make it very easy.

Ashley: We can make that switch very easy – we have an automatic 7 day switch account which is a lot simpler than a lot of people think it is.

Tony: The mainstream banks won’t advertise it’s this easy because they will have a net outflow.

Grant: I was at a business in Bicester yesterday that turns over £2 million and they will have an account with us in the next 7 days.

Ashley: We are reliant on customer deposits to fund what we lend so these deposits are key to our model and we pay reasonably well for customer deposits so I am confident we can offer all of you an excellent option. We do not borrow wholesale to fund our lending.

Tony: During the recession, banks were saying they could lend but didn’t. So why were they saying that when property is so strong here, even post recession the values bounced back relatively quickly?

Grant: Banks would only lend for larger property companies and despite the fact that Oxford’s property values are more robust than most places in the country, bank policy was across the board and Oxford was treated the same policy wise as the rest of the country.

Ashley: We are not over exposed in any particular sector – we are only 8 years old. We will attach a lot more significance to the person or people behind the business, irrespective of the sector. For example, we have lent to pubs, a sector which most banks will shy away from. We are happy to lend providing there is a good, strong character behind the business.

We are a challenger bank, we are challenging the current system to make it easier for our customers to bank. We can get you set up with a bank account and a card within hours – you can walk into our Store in Queen Street this afternoon and walk out with an account and a bank card today.

We like to think we adopt a common sense approach to banking rather than put up barriers for the sake of it.

Richard: This leads us nicely into fraud.

Joseph: If you look at Money Saving Expert and Halifax Vulnerability – we could open accounts in friend’s names to demonstrate the bank’s vulnerability. I am very good at breaking websites and can show how archaic the current rules and regulations are.

Tony: I had lunch with a chap who is a lecturer in computer ethics and he doesn’t do anything on line as he doesn’t believe it’s safe. He uses cheque books and cash. He said that internet banking has never, nor will ever be safe.

Ashley: I’m not an IT expert but Metro have very robust systems. If a customer has been hacked, we as a bank will always make sure the client isn’t penalised. When it comes to social engineering where a customer is duped, then that isn’t the bank’s fault because there is no trail and we can’t expose ourselves to recompensing any clients this happens to. It is the client’s actions, not a bank system deficiency or hack, which has given rise to the payment.

You can’t be vigilant enough when it comes to transferring funds these days.

Nina: I am sceptical about e-mails. One of my colleagues was travelling in the USA and we exchanged e-mails about a payment that might have had to be made whilst he was away or when I was going to be away on his return. No amounts were mentioned

Ten minutes after our e-mail exchange about this possible payment, there was a spoof e-mail mimicking my colleagues email address, requesting a payment for a significant amount of money. The speed of its arrival and the detail behind the email address proved it was fake.

Joseph: E-mails are not secure by design. WhatsApp is 100% secure – there is no way to decode these messages. The way encryption works with these apps is, however, getting better.

If you are a bank or provider of finance and you would like to meet members of the B4 community to explain how you operate or provide more information on a particular aspect of finance, please do contact B4.

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