“It’s not about tech or physical, it’s about integration,” says Metro Bank CEO

Metro Bank CEO Craig Donaldson says the blend of tech and physical is the key to giving greater choice to customers.

Speaking at The Economist’s Finance Disrupted conference this morning, Metro Bank CEO Craig Donaldson (pictured above) weighed in on how the banks should think about balancing technology and physical infrastructure.

Donaldson’s message was that customers want to consumer things “at a time that suits them”, and that the seamless integration of software with an old-school branch network is the best way to cater to that. He argued that technology in banking should create choice, not remove it, in response to questioning over the future of digital-only challenger banks – such as Starling, Atom and Monzo Bank.

Donaldson admitted that there “are definitely opportunities” for these operators, but stood firm in arguing that a purely digital approach serves only to limit a customer’s options.

Metro Bank became the first new UK bank in over a hundred years when it received its banking licence in 2010. Best-known of the challenger/neo banks, Metro now has 48 branches across the UK. Donaldson said in this morning’s speech that he believes the bank would need around 250 to achieve full UK coverage, which is significantly less than the nation’s biggest high street brands.

But Metro also sets great store by digital innovation. Indeed it revamped its entire digital banking platform in November of last year.

Donaldson spoke about the Metro Bank's card replacement process as an example of why a tight integration between the technological and the physical is best. Metro’s integrated systems mean that customers who lose their card can get a new one printed in-store in a matter of minutes. Donaldson said that the plans of digital-only disruptors to courier cards out to users are a bit short-term, as the cost of couriering will become prohibitive should user-bases start to swell. And the alternative – sending cards out via the postal system – just doesn’t seem especially innovative.

The Metro Bank boss sees space in the market for digital-only players, but hammered the line that banking disruption can (and must) be delivered both in-store and online.

Donaldson will deliver a keynote speech on why marketplace lenders and challenger banks make natural bedfellows at the AltFi Europe Summit on March 30^th at the Brewery.