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Following its regulatory approval, Atom Bank – one of the growing group of challengers to the established UK high street banks – is set to launch later in 2015 with its products and services delivered through an app for mobile devices and desktop computers.
The bank’s head of IT, Stewart Bromley, says that, because Atom was designed for an app rather than a branch, it will be fundamentally different to traditional banks.
Traditional banks were built for branch services he says, and only launched mobile apps under the pressure of consumer demand. But mobile banking is impossible to ignore today – according to figures from UBS Evidence Lab, nearly two billion people will use their mobile to bank by 2019, as the number of users doubles in the next four years.
And, while traditional banks were designed to deliver services through branches, Atom Bank started with an app in mind – which is something that makes it truly different to other full-service banks, says Bromley.
The bank, which got its banking licence in June 2015, was the brainchild of founder Anthony Thomson. In 2009 he set up Metro Bank; the first banking organisation to open in the UK since the end of the 19th century.
Bromley joined Atom in April 2014 and took on a role to design the bank from a customer perspective. He has worked in the banking sector for 12 years and is no stranger to the challenges facing the big traditional banks in moving to digital services. At one time he ran digital developments at HSBC with about 300 staff, and has also done consultancy work at Nationwide and Lloyds bank.
When he joined Atom, the company was going through a process of discovering what its digital transformation was to be. “We spent weeks just working out what that would look like,” he says. He said the team asked themselves: What type of company is it and what business is it in, what is the customer proposition – and why would customers want this?
Now that the bank is designed and has regulatory approval, Bromley has switched to the more traditional chief operating officer (COO) role, where he overseas IT among other duties. The IT side mainly involves managing service providers; Atom has outsourced everything apart from the banking app at its core.
“We believe in selecting the best-in-breed solutions, and using them as much as we can, off the shelf. There is little differentiation in these commodities. Not only do we buy these things in, they are also hosted externally, mainly cloud-based, and therefore we have no direct ownership of the physical tin,” says Bromley. This provides flexibility and low capital and operating costs, he adds. “When it comes to the customer-facing elements, such as the app, we believe this is differentiated significantly. Hence, we own and develop these components ourselves.”
He says that, as a result, the overall IT team is quite small but covers all the core disciplines, such as service management, enterprise architecture and testing, for example. There is also a user experience and mobile development team.
Bank apps vs branches
The app has been through some usability and system-integration testing and will always be in development. The app uses the capabilities of the Unity gaming platform and incorporates a 3D interactive experience.
“The Atom mobile app is built using a 3D graphic development engine because we wanted our experience to be much more engaging than traditional banking apps. When you ask customers what mobile experiences they like and enjoy, they rarely state their banking app. Rather, they talk about entertainment, games and travel apps.” He says that, if you want to deliver a great mobile experience, you have to compare yourself to the best, inside and outside of the industry sector.
“Customers expect graphical, rich-media engaging experiences, that are also functional, easy to use, fast, and helpful. Of course, they also expect banking apps to be secure. When you can start from scratch and leverage the latest technology, you can create a banking experience that is totally unique and a step-change from what already exists today.”
Read more about financial services challengers
- Here are six challenger banks using IT to shake up UK retail banking.
- Here are six IT companies that are shaking up retail banking.
- Atom Bank has been granted a banking licence by the Bank of England.
- The UK could be on the cusp of dramatic changes in retail banking, following the launch of a current account comparison service.
- Challenger bank Lintel Bank has applied for a UK banking licence with plans to join a growing group of banks taking on the high street incumbents.
- Digital-only bank Atom could be the first real challenge to high street banks if it turns its low-cost operating advantage into better rates for customers.
Bromley says that building a bank for an app, which is fundamentally different to designing for a branch, will appeal to a large portion of people.
“UK banks today offer multiple channels, that customers can use to manage their finances. For customers who want to use multiple channels, this is perfect: But many of these customers actually have no interest in using all these channels," he says.
"Many only want to bank digitally, and increasingly only on a mobile or tablet – but are forced by their banks to use other channels, mainly because the mobile channel is seen as an addition channel.”
He says traditional banks' functionality and features are limited and built on the same legacy technology as all those banks' other channels: “The product proposition is primarily designed for branch, with aspects available to digital and, to an even lesser degree, mobile. These banks have to design propositions that work across all channels, and the associated operating processes have to support all channels.
“When it comes to mobile in Atom, it is not perceived as just another channel. The mobile, is in fact, your bank.”
“The product proposition is designed explicitly for mobile. The technology has been created specifically for mobile. We can tailor the experience to you as an individual (it’s on your phone, no-one else is going to visit it, like generic branches or contact centres). The functionality in the mobile encompasses as much as you could imagine is possible to enable customers to self-serve in the way they want to.”
He says traditional banks will find it hard to compete in the digital space, due to their legacies.
“They are complex and difficult to change. The cost of change in a startup, leveraging the latest technical capabilities, with a much simpler IT stack designed specifically for mobile, is several orders less," he says.
"Hence, not only can Atom deliver a step-change in experience from day one, it can and will evolve at a pace much quicker than the incumbents, and at a much lower cost."
Bromley admits a bank on an app might not be for everyone. “Some people are not confident enough in either their own digital skills or in believing in the mobile capabilities themselves. Hence, some people will not be ready for Atom. We totally respect this.”
But for the digitally literate – whose mobile phone is integral to how they run their lives – Atom will be perfect, he says.
“Our banking experience will be fundamentally different.”