RBS’s first profit in a decade accompanied by major first for mobile channel

The Royal Bank of Scotland (RBS) revealed two important firsts in its latest financial results, with its first profit in a decade and news that active mobile banking customers now outnumber users of online banking for the first time.

In its latest annual results, RBS revealed it had made an annual profit of £752m, compared with a £6.95bn loss last year. This is the first profit since the bank’s problems during the financial crisis 10 years ago, when it had to be bailed out by the government.

CEO Ross McEwan said the profit was a symbolic moment for the bank. He also revealed a symbolic digital landmark. “For the first time, we now have more active mobile users than users online, a clear indication of the direction of travel of our customers’ banking preferences,” he said.

RBS has 5.5 million active mobile users.

More landmarks like this are likely to follow, as McEwan acknowledged the challenges facing banks like RBS amid rapid technological change. “The financial services industry is going through one of the most significant periods of change we have seen in many years, and we are responding,” he said.

McEwan cited a 40% decline in bank branch transactions since 2013 as evidence that digital banking is on the way up. “Given this, we made some difficult, but necessary, decisions around the scale of our branch network in 2017,” he said.

McEwan said the commercial banking operation was on its own digital journey, with its commercial banking online service, Bankline, moving to a mobile app.

“In our commercial bank, we are supporting customers’ shift to mobile through building our online Bankline service into an app. Currently, 90,000 commercial customers are active on Bankline. In the future, we expect this to move increasingly to mobile.”

RBS will this year launch Bankline Mobile for its larger commercial customers, which run alongside the existing online service.    

“Initially, customers will be able to view transactions and send payments with biometric approval. In the coming quarters we will further expand the scope of what Bankline Mobile offers.”

McEwan said RBS recognises it needs to work with third-party technology firms to keep up with the market evolution. “Over the past few years we have invested in building our partnerships and scouting networks across the globe to ensure we are at the cutting edge of technology,” he said.

For example, the development and application of artificial intelligence (AI) to the RBS business is being achieved through working with IT suppliers.

“By harnessing the latest in computer learning and speech recognition, in partnership with IBM, we have built an AI chatbot. Cora [as it is known] is helping our customers with many of their most common queries,” he said. 

So far, Cora has handled more than 400,000 conversations responding to over 200 different questions.