“If you want to go in and talk to somebody face-to-face you can do so… We think it's really important to give customers the choice [between online and in-store], but we do think a lot of people really value speaking to people,” he says.
Most of the other so-called challenger banks are proudly digital-first, with the likes of Monzo, N26 and Starling Bank providing their services entirely online through a mobile app. However, Metro Bank were the first new high-street bank to open a branch in the UK in over 100 years.
Walters argues that the much-maligned future of high-street banking is down to the poor customer service offered by incumbent banks and that customers still desire human interaction, even if the lockdown has forced customers to become more familiar with digital banking.
A survey by IPSOS Mori conducted for the Competition and Markets Authority (CMA) on bank satisfaction found that Metro Bank’s service in-branch was the best in the UK with 85 percent of customers saying they would recommend it to friends. Whereas for the rest of the banks in the UK, the average recommendation rate was just 68 percent and as low as 53 percent for Royal Bank of Scotland.
“If you picture a branch for a big bank, when you go in it's not welcoming, nobody's spent any money on making it a welcoming environment, the colleagues in there are not very happy to be there and there is a limited range of things you can do… We try to create an environment that is welcoming and is part of the local community,” Walters says.
“We see we have a role to support the sustaining and regeneration of some high streets. Rather than turn our back on that, we're actively embracing it and trying to play a part in reenvisaging the high-streets and making it a vibrant place,” he adds.
Yet at the same time, challenger banks like Starling Bank believe that lockdown has served as a “validation” of their digital-first approach.
“What the lockdown has done and will continue to do once lockdown has ended is accelerate the move to digital. We've never had branches. You've never needed an appointment in a branch to do anything with Starling. We were built for this. We were built for people to do their banking at home,” says Alexandra Frean, head of corporate affairs at Starling Bank.
Frean says the bank has had no interruption to service during lockdown, has seen new accounts come in as normal, and has put no staff on furlough. Research by Apptopia, reported in The Fintech Times, found that Starling Bank was the only “neo-bank” to see app downloads increase year-on-year for the month of May.
A study by Link found that the use of ATM machines plunged by 60 percent over the course of lockdown and Frean doesn’t expect to see a “mad dash” back to cash, a further sign that the lockdown has made people more comfortable using contactless payment and online banking services.
Before the pandemic, bank branches had been closing down in the UK and across the developed world. A House of Commons Library report found that between 2012 and 2019, the number of bank branches in the UK had fallen by 22 percent.
It remains to be seen whether the impact of coronavirus will push customers into a digital first mindset when it comes to banking, but Frean believes the crisis has shown people the “utility” of digital banking. But despite that, as lockdown eases and life eventually returns to normal, there could be a newly found appreciation of face-to-face contact that drives customers back to branch.