Metro Bank, Britain's first new high street lender for more than 100 years, opens its first branch to the public Thursday in a move aimed at shaking up the country's retail banking sector.
Co-founded by billionaire US businessman Vernon Hill, Metro Bank hopes to tap into public dissatisfaction with the traditional banking sector following the recent financial crisis.
The first branch is opening in central London but Metro Bank aims to have up to 250 branches in and around the city within ten years.
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"Everything you hate about your existing bank is what we are going to change," chairman Anthony Thomson told AFP.
"Since the banking crisis, everybody's come to realise the kind of banking we're doing -- which is taking in deposits, making a proportion of those available as loans to customers -- is the way forward".
But analysts have questioned the competitiveness of the financial products being offered. Metro's instant-access savings account offers a return of 0.5 percent compared with the industry's best rate of 2.8 percent.
Its three-year fixed rate bond, meanwhile, pays three percent compared with the market leading rate of 4.3 percent.
"Although they are offering all these other benefits, such as longer opening hours, one of the main things for people is a competitive interest rate," said Michelle Slade at Moneyfacts.co.uk.
"If they haven't got at least a reasonable rate of interest people will discount them. They are going to struggle to get market share."
Metro Bank aims to focus on customer service, with branches open long hours seven days a week except during Easter and over the Christmas and New Year holiday periods.
It will also offer a rapid account opening procedure that will issue debit and credit cards within 15 minutes.
And for dog-owning customers, branches will also provide water bowls and free doggy biscuits, the bank said. It is based on the model used for Commerce Bank in the US, which Hill founded in 1973.
Britain's previous government had called for greater competition in retail banking in the wake of the global financial crisis which led to huge multi-billion-pound bailouts of some lenders.
After the near-collapse of household names like Lloyds Banking Group, Northern Rock and Royal Bank of Scotland (RBS), other groups are also waiting in the wings.
Richard Branson's Virgin Money has ambitions to becoming a major British retail bank while supermarket giant Tesco appears likely to launch full banking operations in the coming years.
