‘How hard can it be?’ Metro Bank founder Anthony Thomson on the retail banking revolution
Metro Bank and Atom founder Anthony Thomson talks to City A.M. about the retail banking revolution – and why he won’t be stopping anytime soon.
Bobbing away in the middle of the Red Sea on a dive ship, with the sun beating overhead and the world’s richest coral reefs sitting in the crystal waters below, a single thought flashed across the mind of Anthony Thomson.
“I’m just really bored of this,” the Metro and Atom Bank founder recalls.
The year was 2006. Thomson had just offloaded his City comms business to Publicis and was six months into a year-long career break; then abruptly cut short.
Thomson, it seems, is a man who doesn’t like to sit around. Even now, a decade and a half after kicking off the challenger bank revolution in the UK with plenty of money stashed away for an easy retirement, we talk as he readies the launch of his latest venture Archie, a new accelerator designed to supercharge a new generation of entrepreneurs.
Why doesn’t he put his feet up after all these years and enjoy the spoils?
“I don’t play golf. I have some hobbies, but this is my hobby,” he tells City A.M. in an interview.
‘A bit of an accident’
Thomson’s atypical journey to bank founder may be part of the reason for his reluctance to slow down. Born and raised in Newcastle, he travelled down to London for his first financial services gig with insurance firm Sunlife Canada in the early 80s on something close to a whim.
Some founders and entrepreneurs speak spiritually of a calling, some innate urge drawing them into an industry. Thomson’s rationale was more hard-headed at the time.
“The reason I joined Sunlife Canada, and the reason I ended up in financial services, was because in addition to the job they offered me £500 in relocation expenses,” he says.
“Back then it was a lot of money. I was able to get all of my possessions I wanted to London in trips in my box waggon Golf, so getting into financial services was a bit of an accident really.”
He took over the insurance firm’s marketing operation before transitioning to agency land, co-founding his comms business before selling up.
It is in his marketing background that the shoots of Thomson’s banking career can be traced. In 2007, the high-street banking roster was a staid and steady one. The same names had existed for over a century without a new licence granted by the watchdog.
“Everything I saw in UK banking at the time was that banks thought the only thing that mattered to customers was price,” he says.
“And everything I knew from my marketing background was that customers are value driven.
“In banking, people want good value, but value isn’t just about price.”
His concept for a new type of banking was born, one that looked beyond the money. Now just came the actual practicalities.
“Launching a bank – how difficult can that be?”
Challenging revolution
Smart regulatory tweaks in the early 2010s and a push for better competition in banking catapulted the UK to the forefront of a challenger revolution.
Now over 70 lenders offer retail banking services in the UK and Britain has spawned some of the biggest names in the business in the likes of Monzo and Starling. Nearly a third of the population – some 20m people – have an account with one of the country’s upstart digital lenders, according to data firm Beahurst.
But between 2007 and 2010 in the wake of the financial crisis, Thomson and colourful US bank builder Vernon Hill faced more untravelled turf. Metro was the first of the crop to emerge and won the first new licence in 150 years. And the bank has, in some regard, suffered for its early arrival.
iPhones were just beginning to take up their permanent place in the hands of the population and Metro bet on a sprawling and brightly coloured branch-centric model. The bank has also since suffered a slew of travails, including wrongly marking a hefty chunk of its loan book in 2019 and incurring a £5.8m fine as a result.
While Thomson stands by the concept of Metro and the need for a new type of banking, he says the firm got its strategy wrong.
“It was very clear to me from market data that the future of banking was going to be digital in general and mobile in particular,” he says. “The Metro Bank board didn’t share that view. They thought the future was still gonna be branch-based.”
Metro’s shares have cratered in recent years and the firm has been the target of takeover bids from private equity. After leaving the bank in 2012, Thomson’s view on his co-creation now is not a glowing one.
“I think Metro going forward is always going to be a niche player,” he adds.
For its part however, Metro has doubled down on its physical and digital strategy and is among the few lenders to be actively expanding its footprint. It’s even making inroads into new territory, with 11 ‘stores’ set top open in the North by the end of 2025.
Up and Atom
It was in the call to digital banking that Thomson began his next venture – feted Durham-based bank Atom.
Atom has emerged as something of a darling in recent years with steady profits and a more traditional lending approach compared to the breakneck customer growth of its big-name peers.
“It’s a tougher model and much harder yards than if you’re going to build a traditional balance sheet bank. Which is why in the early days, it did look like Monzo and Starling and others were accelerating way, way beyond Atom” he adds. “But I think the time has proved that the model was right. Atom is now making money.”
Atom has been something of an outlier in its profitability. The firm notched its first annual operating profit of £4m in July, swinging from a £2m loss a year prior.
He left in 2018 after Spanish bank BBVA snapped up a major stake – “It felt a bit like working for BBVA, so I decided to step down” – but still, as expected as a founder and major shareholder, he maintains it is the bright spot in the crowded field of British lending.
The lender now is gearing up for one of the most hotly anticipated IPOs in recent years, which he is insistent should take place in the UK after a “horror show” flirtation with a spac merger in the US.
“I think it’d be very unusual to see a bank like Atom float on the other market than the UK,” he adds.
Feet up?
For now though, Thomson does not have to concern himself with the rigmarole of float preparations. He is sitting in Abu Dhabi waiting to formally launch Archie to a wave of hopeful new entrepreneurs.
The plan is to offer founders expertise and mentoring in exchange for a stake in the business. He says it gives him skin in the game of a new crop of companies.
His wife has in the past lobbied him for a slowdown and feet up, but he has made his objections quite clear.
“I’ll go crazy if I retire and you’ll shoot me,” he tells her.