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Challenger bank Starling's former CTO Tom Bloomfield, along with other staff, have set up a bank for people who live on their smartphone.
Tom Bloomfield was CTO at Starling, which he co-founded, until February 2015. He is now part of the team building rival bank Mondo, which is currently seeking a banking licence from the Bank of England. Mondo has plans to expand into Europe and has raised £2m in funding from Passion Capital.
The bank, which already has customers testing its service, will base the services it offers on customers’ smartphones.
Mondo's website issued the rallying call: “It’s time for a bank that makes life easier, not harder.
“A bank that belongs on our smartphone, not on the high street.
"A bank that truly keeps us informed and in control, rather than trying to catch us out with fees and charges.”
Changes to the way people live, combined with the latest digital technologies, are creating the perfect conditions for financial startups to differentiate their services from traditional banks.
Banking model disrupted
Mondo will give customers the power to instantly block their own accounts temporarily if they run out of funds or lose their debit card. It will use notifications to help customers manage their money.
Recent months have seen a spate of challenger banks granted licences, with others going through the process of getting approval.
Read more about challenger finance firms
When Metro Bank opened its doors in 2010, it was the first new company to be granted a banking licence in 150 years.
Challenger banks include Atom Bank, Fidor Bank, Charter Court Financial Services and Lintel Bank. Some technology companies – such as Google and PayPal – are increasing their reach in financial services, through payments platforms and information enrichment.
Starling Bank, which Bloomfield co-founded with ex-Allied Irish Bank worker Anne Boden, is currently seeking a UK banking licence before raising the capital needed. It plans to get a full licence at the end of 2016.
Boden said she is aiming to change banking in the same way Amazon changed retail and Apple changed music.
At a recent SAP financial services event Boden said a whole generation live their lives differently. “They are used to lots and lots of technology and lots of apps to help them manage their lives,” said Boden.
Starling bank is a digital current account only bank with a debit card and access to all major payment systems. It also offers a service to help people better manage their finances.
“We do one thing very well and we help our customers select other suppliers for other financial services products,” said Boden.