A total of 74 million transactions a year are done in the UK via telephone, 427 million at branches, 705 million by the internet and 895 million via mobile devices tament to the talent and the dedication of our extraordinary team here in Durham and to the support and vision of our investors. It’s also a positive endorsement of our business plan and model from the Prudential Regulation Authority and the Financial Conduct Authority. We now have the mandate that only comes with a banking licence – to change banking permanently for the better.” Atom says its app aims to set new standards for the banking sector and will bring pioneering technology to Europe for the first time. It also claims to be leading the way in delivering the ultimate easy and conve-
Edward Twiddy the Chief Operating and Innovation Officer
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and Jim O’Neill, the former Goldman Sachs economist. However, it now needs to attract new institutional and strategic partners to help take it to £75 million of capital to lend to individuals and small-business customers. Atom will have lower costs than established high street lenders as it will not have branches to run and will have a clean balance sheet. It is targeting a costincome ratio of about 30%, considerably lower than many larger banks. Atom says it is on track for full launch late in 2015 and plans to break even over the next three to five years. Thomson says, “It’s a tes-
International Finance Magazine Oct - Dec 2015
nient banking experience. Biometric security and in-app account opening are just some of the features being developed to deliver a branch-free, paper-free and stress-free bank. Mullen says, “We’ve set about designing a banking app that’s in tune with how people think about their money. Taking an appbased approach allows us to use all the features of your mobile device to provide a slick and highly personalised experience. “The likelihood that we’ll put our bank online in any traditional way is very small. We’ll let our customers download an app onto their desktop. There are advantages for us from a data security point of view operating it as an app. “Attitudes to banking are changing much quicker than any of us could have expected. There’s a whole generate of people for whom apps are the internet. It will offer total control and transparency with a depth that is beyond anything else on offer in the market today. “I can’t guarantee we will never have an IT problem, but we are building and testing a bespoke system. We are in a hurry to get it right.” Atom Bank will be the latest in a line of challenger banks that have arrived on the British banking scene since the financial crisis
erupted in 2007. Other new entrants include Thomson’s Metro Bank, Richard Branson’s Virgin Money, which hived off the profitable parts of Northern Rock and Aldermore. Targets for Atom Bank are nothing if not ambitious with Mullen claiming that from a standing start it is possible that his bank may have five million current accounts by 2020, which is 5% of the UK market. Although the bank expects to predominantly attract 18 to 34-year-olds it is optimistic that its technology will appeal to a broad range of people beyond this age group. Thomson says, “We think that is very ambitious but all of the things we hear are that mobile banking is the way forward. Ours is the right model at the right time.” The latest figures from the British Banking Association (BBA) appear to back Atom’s confidence with a major change in the way people do their banking well underway. A total of 74 million transactions a year are done in the UK via telephone, 427 million at branches, 705 million by the internet and 895 million via mobile devices. In five years, mobile has gone from being the least common way to bank to being the most popular.