Metro Bank finance director steps down to take new role at Revolut

Metro Bank’s finance director is leaving the embattled lender to take on a new role at fast-growing financial technology group Revolut. David Maclean …

Metro Bank’s finance director is leaving the embattled lender to take on a new role at fast-growing financial technology group Revolut.

David Maclean is joining the digital firm after stepping down from his role at Metro Bank, which has suffered a torrid six months in the wake of a major accountancy error.

Read more:What are the banks doing to help survivors of financial abuse?

His exit marks the latest in a string of recent senior management changes at the high street bank, which last week posted plunging profits and announced the departure of its chair.

According to Sky News, which first reported the move, former Goldman Sachs executive Michael Sherwood is also set to join Revolut as a non-executive director while asset management veteran Martin Gilbert is being touted as the new chairman.

Nik Storonsky, Revolut’s founder and chief executive, said: “Dave brings a wealth of banking and financial services experience to the table and, as we prepare to launch Revolut in new international markets, will play a crucial role in our mission to help improve the financial wellbeing of millions of people worldwide.”

Read more: Metro Bank share price plummets in wake of profit drop and departure of chair

Maclean’s appointment, which comes after Revolut’s finance chief Peter O’Higgins stepped down at the start of this year, is subject to regulatory approval.

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Revolut lines up Metro Bank exec MacLean as next CFO

… financial backing from some of the biggest names in the venture capital industry, including Balderton Capital, DST Global and Index Ventures.

David MacLean, Metro Bank’s finance director, has resigned to join the fast-growing digital bank Revolut, Sky News learns.

A senior executive at Metro Bank is being lined up as the new finance chief of Revolut, the British digital bank which is poised to raise hundreds of millions of pounds to fuel its expansion.

Sky News has learnt that David MacLean, who has been finance director of Metro Bank since 2016, is to join Revolut in the coming months.

His appointment comes after a torrid period for his current employer, which has seen billions of pounds of deposit outflows amid concerns about its financial health.

At Revolut, Mr MacLean, who reports to Metro Bank’s chief financial officer, will take on responsibility for the finances of a fintech company which has itself been forced to respond to stiff challenges to its reputation.

Mr MacLean’s recruitment will form part of a concerted effort by Revolut’s founder, Nikolay Storonsky, to bolster its senior ranks.

Michael Sherwood, the former boss of Goldman Sachs in Europe‎ and one of the City’s most prominent bank executives, is to join Revolut as a non-executive director, while Martin Gilbert, the fund management executive, is being lined up as its new chairman.

The hiring of a new finance chief comes after Peter O’Higgins resigned earlier this year.

Steve Tryner has been holding the role on an interim basis for the last few months.

In a statement issued to Sky News on Monday, a Metro Bank spokesperson said: “We can confirm that David MacLean is leaving Metro Bank to take up a new role.

“We wish him every success.”

Mr Storonsky later said of the appointment: “Dave brings a wealth of banking and financial services experience to the table and, as we prepare to launch Revolut in new international markets, will play a crucial role in our mission to help improve the financial wellbeing of millions of people worldwide.

“We’re excited for Dave to join us later this year”.

From a standing start less than five years ago, Revolut now has close to six million customers across Europe, roughly half of whom are in the UK.

Revolut says it is opening 12,000 accounts every day – equating to four million each year – and has received financial backing from some of the biggest names in the venture capital industry, including Balderton Capital, DST Global and Index Ventures.

A further funding round, which is expected to seek in the region of $500m, is likely to take place later this year amid a race by banking start-ups to raise capital for expansion and regulatory purposes.

Monzo, which is chaired by the former Northern Rock chief Gary Hoffman, announced a £113m fundraising last month which valued it at more than £2bn.

Zopa, another digital player, is also in talks with investors, while Atom Bank has just raised another £50m.

Mr Storonsky recently told Financial News that he would like Revolut to be worth between $20bn and $40bn before it contemplates a stock market listing, which is likely to be several years away.

The new board members’ arrival at Revolut will bolster a line-up lacking big City names, and which has faced searching questions about the quality of its compliance functions.

The firm became mired in a row about claims made in a newspaper article that it had “switched off” an automated system designed to prevent its money transfer system being used to violate international sanctions.

Revolut insisted that the new system was simply being tested alongside existing controls.

The company has also faced questions about alleged links ‎to the Kremlin, which it has vehemently denied.

The Bank of England’s Prudential Regulation Authority recently challenged faster-growing firms under its auspices to adopt more rigorous stress-testing and evidence of greater challenge by board members.

As well as the UK, Revolut operates in Australia and across Europe, with launches in Canada, the US, Japan and Singapore expected shortly.

Sources said its next round of funding was likely to value it at more than $5bn, potentially making it Britain’s most valuable recent tech start-up.

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Bank of England fail spotted by regulator

Evolution, as they say, may be better than revolution, however our developed financial technology industry has the ability to create a revolution which …

Metro Bank’s accounting error that could lead to the firm needing a vast round of capital from investors was discovered not by their own executives, but by the Bank of England. FinTech is moving the whole business of financial services forward, largely from London, but experience is everything

The Bank of England is one of the world’s most esteemed central banks.

Established in 1694, only a short period of time after King Henry VII had finished spending his life reducing dissenters to kit form, it is regarded as one of the mainstays of the entire world’s financial, industrial and trade infrastructure and is issuer of the world’s highest valued currency, the Pound.

Perhaps due to its impeccable record over several centuries which saw it underpin the entire colonial enterprise and be the backer of the global industrial revolution before becoming the world’s most reliable and arguably most powerful post-war institution, the Bank of England’s eye for error is still superior to the new, more modern banks that England is a pioneering force in the establishment of.

This week’s example involving one of Britain’s new, technology focused retail outlets, Metro Bank, concerns an accounting error which no staff from Metro Bank were able to decipher.

Metro Bank last week admitted that it underestimated the risk in a string of commercial exposures, a mistake which could force it to raise another £300 million from investors, after the error was flagged by the Prudential Regulatory Authority (PRA) which is the regulator that is responsible for overseeing banks in the United Kingdom.

This error may well not be related directly to electronic trading or application-based banking which is now gaining huge traction in the UK, but it does demonstrate what happens if relatively newly established firms gain vast economies of scale without the vast experience of the established City giants when assessing risk.

The error, which caused Metro Bank’s share price to decline by 39%, was in fact first identified by the Prudential Regulation Authority which is a division of the Bank of England.

Since the admission last night that it was the Bank of England that identified the error rather than its own senior management, the bank’s shares have now lost more than 50% of their value in total since Metro Bank had to report the mistake on January 23.

The bank warned the errors, in the way it had calculated the weight of some commercial loans and buy-to-let loans to major landlords, would take a chunk out of its risk-weighted assets. In a statement yesterday, the company said: “Ongoing supervision by the PRA helped to identify potential inconsistencies in certain loans which were raised with the bank.

This is a very important occurrence, and at this time during which new investment platforms and banks are being developed with technology-led interfaces allowing investors to take control of their entire portfolio via a single dedicated platform – a direction which FinanceFeeds endorses – it is important that risk management and counterparty risk control are considered paramount.

In an industry that is continually evolving its technology to appeal to a sophisticated new generation of investors and traders in order to move on from the white label third-party spot trading platforms and affiliate style structures in third-tier jurisdictions that increased the number of identical offerings and a created a short term client base of ‘conversions’ rather than customers, it is important that firms embrace the new methodology which Metro Bank and its peers have brought to the UK.

There are several other examples of much needed new platforms, often highlighted by FinanceFeeds, that our industry could work very well with in terms of providing liquidity, risk management solutions and market integration, especially those which provide stock trading as well as traditional banking on one application as this simplifies the financial services industry at the same time as elevating our retail business into a new high quality environment with good sustainable first-tier jurisdiction client bases.

It’s just important to get the calculations right…. Evolution, as they say, may be better than revolution, however our developed financial technology industry has the ability to create a revolution which moves the game on whilst avoiding incidents such as this one.

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Artificial intelligence will help Metro Bank customers manage their money

Metro Bank is planning to offer its customers a money management service that uses artificial intelligence (AI) technology. This summer, the bank said it will launch a service, known as Insights, that will use AI technology from Personics to help customers manage their finances. Download this free guide …

Metro Bank is planning to offer its customers a money management service that uses artificial intelligence (AI) technology.

This summer, the bank said it will launch a service, known as Insights, that will use AI technology from Personics to help customers manage their finances.

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Available via Metro Bank’s banking app, Insights will use predictive analytics and AI to monitor transaction data and patterns in real time to identify trends in customers’ spending habits. It will then provide personalised prompts to help them control their spending.

Prompts might include information about subscriptions, alerts to unusual spending, helping customers avoid additional fees, and alerting them to large or duplicate transactions. The service will also provide spending analysis, and more featured are planned.

Metro Bank CEO Craig Donaldson said: “We’ve all been there when you forget to cancel a free trial and end up accidentally subscribing for another month, or you leave a cafe only to realise you’ve mistakenly been charged twice for the same cup of coffee.

“Insights is about being on the front foot – cutting through the noise to provide relevant and timely tips that make a real difference to customers. This is yet another example of us using technology to make people’s lives easier.”

Read more about Metro Bank IT

Banks are increasingly turning to AI technology to automate customer services. This supports their digital strategies that aim to give customers more, often personalised services, and enables them to reduce their cost bases by reducing the number of people needed to provide such services.

According to recent research from consultancy GFT, more than eight out of 10 UK retail banks recognise the importance of AI to their digital transformation projects.

Metro Bank became the first new UK bank in more than 100 years when it was launched in 2010. In contrast with some of the more recent challenger banks, which have gone branchless, Metro opted for a business model that included a branch network.

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Metro Bank (MBNKF) Rating Increased to Neutral at Citigroup

Metro Bank logo Metro Bank (OTCMKTS:MBNKF) was upgraded by investment analysts at Citigroup from a “sell” rating to a “neutral” rating in a research note issued on Wednesday. Separately, Zacks Investment Research upgraded Metro Bank from a “sell” rating to a “hold” rating in a research report on …

Metro Bank logoMetro Bank (OTCMKTS:MBNKF) was upgraded by investment analysts at Citigroup from a “sell” rating to a “neutral” rating in a research note issued on Wednesday.

Separately, Zacks Investment Research upgraded Metro Bank from a “sell” rating to a “hold” rating in a research report on Wednesday, December 20th.

Shares of Metro Bank (OTCMKTS MBNKF) traded up $0.77 on Wednesday, hitting $50.67. The company had a trading volume of 1,280 shares, compared to its average volume of 2,037. Metro Bank has a 52-week low of $38.48 and a 52-week high of $50.67.

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