The Financial Services Authority has granted a banking license to start-up Metro Bank, which promises to usher in a new era of financial services provision based on old-fashioned deposit-based lending and superior customer service standards.
The new bank plans to open two branches in central London in the next three months, and aims to expand to more than 200 outlets in Greater London within ten years. The high street branches will be supported by a telephone and Internet operation.
Metro Bank has been in gestation for over a year and has so far raised £75 million from private investors to fund the roll-out. It is looking to cash in on consumer distaste for traditional banking methods in the aftermath of the credit crunch.
Using the slogan 'Love your bank', the start-up says it will open seven days a week and promises a 15-minute turnaround time for approved account applications over-the-counter.
Anthony Thomson, Metro Bank chairman, says: "With the FSA authorisation of Metro Bank we are entering a new era of banking, one where we go back to a more traditional banking model where customer service is key and there is deposit based lending."
Metro Bank is one of a rash of greenfield operators and non-bank retailers looking to leave a mark on the UK high street.
Virgin Bank is likely to launch later in the year, and earned its own banking license following its recent takeover of regional bank, Church House Trust. In a radical departure from other UK banks, Virgin says it will do away with hidden charges and instead levy a low monthly fee for current account holders.
Virgin Bank chief Jayne-Anne Gadhia, told the BBC: "We want to live up to Virgin's ethos of making sure people aren't ripped off, that they know what they're paying for with no hidden charges and I think that's really important."