By Matt Scuffham
Atom Bank’s mobile banking app is so commercially sensitive that its developers won’t even allow it to be demonstrated.
The bank, whose founder believes can transform consumer banking in Britain, is in the final stages of preparation before launching its first products later this year.
Its investors, who include star fund manager Neil Woodford, venture capitalist Jon Moulton and Jim O’Neill, the former chairman of Goldman Sachs Asset Management, are betting that Atom’s innovative banking app will appeal to younger customers. And the bank can save money by having no branches, potentially helping it to make a profit quickly.
Speaking at Atom’s headquarters in Durham in the north east of England, where 100 staff are preparing for the launch, founder Anthony Thomson said Atom’s timing was ideal given the surge in demand for mobile banking apps.
“We are in the right place at the right time. I think we saw that the future was going to be mobile but I certainly didn’t see the uptake being as rapid as it’s been,” Thomson said, referring to industry data showing mobile banking growth in Britain.
The app, created by software developers who usually design video games, is expected to have particular appeal for 18-34 year-olds who are already routine users of mobile apps, Thomson said.
“The more you use mobile devices for anything, booking a theatre ticket, booking a flight, paying for a coffee in Starbucks, the more likely you are to consider doing your banking on it because it just becomes a de facto device you use for everything,” Thomson said.
Thomson, 61, has fundamentally re-assessed his view of the future of consumer banking since launching Metro Bank in 2010. Metro Bank was firmly rooted in the branch banking culture but now Thomson, who left Metro Bank at the end of 2012, believes digital banking is the future.
Britain’s biggest banks have seen a slump in customers using branches. Royal Bank of Scotland has reported a 36 percent decline in branch transactions since 2010, while mobile transactions by RBS customers have grown more than 300 percent in the same period.
A report from the British Bankers Association in June predicted that by 2020 customers would use their mobile to manage their bank account 2.3 billion times, more than internet, branch and telephone banking put together.
The report also forecast that Britons would use mobile devices to check current accounts 895 million times this year, more than double the 427 million times they will visit bank branches.
“The bank branch as a transactional centre is dead. All the data tells us this,” Thomson said.
One of Thomson’s first acts after starting work on Atom Bank in 2013 was to appoint Mark Mullen, who previously ran HSBC’s telephone banking arm, First Direct. Mullen has forecast Atom can take a 5 percent share of the personal current account market in Britain over the next five years.
Although Atom is keeping its app under wraps, its Chief Operating and Innovation Officer Edward Twiddy hinted at some of its features.
“The app has three dimensional qualities to it and it’s built in such a way that you can transform the experience with the app itself. You can choose how you want to do things,” Twiddy said.
Atom, granted a banking licence in June, is one of a number of new banks hoping to challenge Britain’s biggest lenders, which have been hit by scandals ranging from the mis-selling of loan insurance to the rigging of benchmark interest rates.
Metro Bank, one of those challengers, has made an impact on the industry with its extended opening hours and absence of sales incentives for staff, but even though its deposits and loan book have grown rapidly, it has yet to make a profit.
