Technology is simply a means to an end at Metro Bank, as the UK's newest retail bank seeks to bring a breath of fresh air to the high street and focus heavily on customer service.
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The first banking organisation to open in the UK since the end of the 19th century, Metro Bank chose to completely outsource its IT operations and employ "a handful" of technology staff, who are largely focused on supplier management.
Key partners include banking systems specialist Temenos, which supplies the company's core platform, as well as VocaLink and NIU Hosting. According to Metro Bank's chief operating officer Aisling Kane, outsourcing was the best model to maintain its IT.
"We are a start-up, so we could have built an IT department with over 100 people very quickly and have all the specialist skills but we had the opportunity to go out, get best of breed and ensure we had the platform for the future," said Kane, who is accountable for both operations and IT.
"In most banks you have legacy systems and hardware so you never have the opportunity to start again. We have a single client view through one system and we didn't have to bolt on lots of different systems onto an existing platform, which gives us a huge advantage."
The IT set-up
Metro Bank's core banking platform was implemented in nine months and provides about 80% of the bank's functionality, including customer relationship management support for current accounts and cash deposits.
Operations are based on Commerce Bank, the group Metro Bank co-founder Vernon Hill set up in the 1970s, which is said to mirror Burger King's proposition.
According to Metro Bank co-founder and chairman Anthony Thomson, UK IT suppliers took some time to assimilate the US model of outsourcing based on payments per transaction per month.
"We spent a lot of time talking to prospective outsourcing IT vendors and it took a while for the concept to be grasped," said Thomson.
The process of getting Metro Bank off the ground started in December 2007, but was stalled due to the recession. Temenos was signed up in summer 2009 after being chosen from of a group of "half a dozen" potential suppliers.
According to Thomson, the bank spent "very little" on IT, since all the software is hosted externally and the company does not have desktops - apart from Blackberries, most of the 105 employees use Wyse thin-client equipment and the call centre is based on voice over IP.
"One reason for going down [the outsourcing] route was [avoiding] sunk cost in terms of IT investment - we haven't had to build our IT system, our partners have done that for us. And they were prepared to make an investment in us and the infrastructure, because they believe in the vision and the potential of our business," he said.
"We have state-of-the-art IT systems that are infinitely scalable. Temenos probably spends more updating their system every year than any bank could ever afford to spend. If you build a system, it is obsolete the day you start, whereas ours will constantly be updated due to this partner investment."
Thomson's first hire for Metro Bank was chief executive Craig Donaldson, who recruited the remaining senior team members, including Kane, who was director of UK operations for Anglo Irish Bank and had worked with Temenos before.
According to the bank's chairman, the fact that Kane had experience with what would become the company's core platform was secondary to the essential skill requirement, which is a focus on customer service as well as operational experience.
"IT is critical in terms of the delivery [of customer service]. You can't claim to be able to focus on the customer unless you have a single customer view and we know other banks are struggling with numerous technology platforms and it is just impossible for them to deliver good service when using disparate systems that don't talk to each other," said Thomson.
Kane added that IT is a key tool to be able to perform the tasks supporting the daily jobs of customer facing staff. "They don't need to worry about IT, just about servicing customers," she said.
According to Metro, innovations such as contactless cards - which rival Barclays has been pushing over the last couple of years - is "ready to go, it is just a question of when to introduce it". The same can be said for a possible mobile banking service, which would start with basic functions such as balance display and overdraft alerts.
Unusually for a bank operating in the digital age, Metro will not allow customers to open an account online as it wants to "start the relationship face-to-face", but it offers an internet banking service. The firm did not disclose how many accounts have been opened so far, but Thomson assumes that most new clients would have activated their online banking facilities.
Other innovations in Metro Bank's business model - such as instant issuance of debit cards in-store, which is supported by VocaLink - all rely on third-parties to work from an IT standpoint, but the banking firm is not concerned about relying on its suppliers for innovation.
"The innovation comes from within. We have suppliers to make the things that we need happen and if they are not giving us that piece, we would go to a supplier that can deliver that. We picked partners who keep above and beyond what our need will be - that is our challenge, to ensure that happens," said Kane.
"We expect our suppliers to come up with ideas, but are not looking to our suppliers to provide innovation to us, we would be dead in the water if that was the case," she said.
"It is the responsibility of every IT manager to come up ways of doing things better - it is not a one-way thing, it is a two-way dynamic. It has to be."
The crown jewels
The company's call centre is based above the bank's first branch in central London. Despite Metro's determination to remain lean, the chairman said that aspect of the business is not a candidate for business process outsourcing.
"We have to absolutely own the interaction with customers, so we use our own people, on the phone and in-store," he said.
"And because the call centre is based on voice over IP technology, it is instantly scalable. We can push the wall back in our current room, put some more desks in and we are good to go. We could literally migrate overnight."
Metro Bank employs a small amount of IT people whose function is solely to manage third-party service delivery, while project managers can be brought in when needed. According to Kane, the size of that function is not expected to grow to meet future demand.
"The team will not scale up as we expand - we would have got it wrong if that was the case," she said.