Banking group chief executive wants to B number one

CYBG chief executive David Duffy

The chief executive of banking group CYBG has a very clear aim for his business.

“The ambition is to become the number one bank across retail and SME banking,” said David Duffy.

“It’s a simple ambition and it’s based on delivering a world-class experience, the best experience of any bank in the area, and that’s where it starts – customer experience.”

One of ways it is seeking to achieve that aim is through Yorkshire Bank’s B brand. The product is a current account and instant savings account that is managed through an app, but yesterday it also became a concept store.

This week it has opened the doors on the first B store in Birmingham city centre, having trialled the ideas and technology since April in its Studio B format on Kensington High Street in London.

Katy Manning, customer centre banking manager at CYBG’s B Birmingham branch

Duffy is an Irishman whose 30-year banking career has taken him from London to New York, Amsterdam, Singapore, Dublin, and for the last two years to Glasgow-headquartered CYBG.

He has seen enough to know what banks have been failing at.

“This business, retail business, is a combination of consumer mentality with great technology – and banks are traditionally poor at both,” he said.

“This is an example of how you change the culture. You think differently – so this branch doesn’t look like a typical branch – the product is very innovative in terms of technology, and the people in it are from a consumer background, where you really have to fight for your margins in the battleground every day.”

The staff are a mix of experienced banking staff and others plucked from consumer industries. Their nine weeks of training was rounded off not by spreadsheets or statutory information, but by time spent with Apple to hone the customer experience behaviours.

Duffy took over at CYBG in June 2015, as it was completing its demerger from National Australia Bank, ahead of its float in February of the following year. The changes have been structural, but also cultural.

“What we have done since we have become an independent company is stop thinking like a subsidiary of some large, global, complex organisation. We’ve said ‘what is our mission in life?’ It is to serve customers brilliantly.

“The most important discussion we’ve had is ‘what is our culture?’ Because most banks have a poor culture, as we have seen with all of the problems that have occurred.”

CYBG’s chief executive David Duffy, let, at the launch of its B store in Birmingham, with group innovation and marketing director Helen Page, and group customer banking director Gavin Opperman

This focus on customer need – Duffy describes it as an “obsessiveness” – has resulted in a technology-led solution. But he insists it is “technology is in support of the customer experience” and the bank will continue to open branches as it sees fit.

But balancing the effectiveness of technology, by definition an arms-length solution, and the personal touch of old-style banking is, he acknowledges, “a very delicate art”.

“You start with what the customer behaviours are, and what they need and want – and you try to do the best with that, and work backwards,” he said. “As opposed to the normal DNA of a bank, which is ‘what do we need?’. You start with the customer.

“Most customers want a branch for a certain activity i.e. complex credit decisions or big life decisions. But they don’t want to have to deal with a bank to do basic activity.”

The stock-market listed owner of Clydesdale and Yorkshire Banks is a FTSE 250 company and last night’s close price of 295p – near to its all-time high, having only closed above 300p once – gives it a market value of £2.6bn.

By that measure, Barclays is around 12 times bigger and HSBC is more than 50 times its size. But, with around 6,700 staff and a history dating back to 1838, it is far from being a challenger bank.

“You quite often get labelled as a challenger, in that they talk about technology,” said Duffy.

“What we are saying is across SME and retail, we will offer a brilliant experience like no other, and we will support that with brilliant technology.

“We can offer the technology the small players can, and we can offer the services the big players can. If we can execute on the experience for customers that we are promising, I think we can easily compete with the smaller challengers and we can very successfully take market share from the big players.”

Paul Reeves, CYBG’s head of customer banking in Birmingham with some of the New Street team

The B store on New Street in Birmingham will also be Yorkshire Bank’s new business banking centre, which will be the home for its commercial, and corporate & structured finance, teams,

It has launched with a commitment to lend £100m a year to SMEs in the West Midlands, but for Duffy the pledge is more than a number.

“We want to support growth, in simple terms,” he said. “We put offers out there – £100m is a number. What we are doing in that sense is giving people the understanding that the funds are there.

“Giving SMEs confidence that they can have funding to grow, in a market where a lot of SMEs believe they can’t get good access to credit.

“What we want to be known for in Birmingham and in the SME space is as a bank that will lend money, first and foremost. That we’ll do so with sectoral expertise behind that. And we will work constructively with any business to help shape its future and how to grow.

“This is the real world, it is a what a bank should do well. The rest is just shiny stuff.”

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