Despite UK government efforts to increase competition in the banking sector, the Metro Bank’s president has said that limited ITO support is preventing emerging banks from challenging large incumbent banks.

The lack of IT outsourcing in the UK compared to established suppliers in the U.S. has helped to limit the growth of emerging start-ups.

UK banks struggle to upgrade old IT systems

Metro Bank President Vernon Hill, said in an interview with City A.M: “There are 7,000 separate banks in the US and they have a tradition of outsourcing IT. It is very efficient for a new bank to buy a packaged IT programme which is cheap to install and the provider keeps it up to date.”

“That is just not here in the UK; no banks ever outsource IT. British banks build their own systems and you can see how far that has got them.”

Metro Bank represents one of the start-up firms that the government backed to improve overall competition and reduce the dominance of the four main high street firms.

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