After HSBC, RBS Launches Digital Bank Bo to Bridge Technology Gap
After having disturbed relations with customers for a long time due to the accusations placed by the Financial Conduct Authority, the Royal Bank of Scotland (RBS) has decided to impress it customers with the launch of its new digital bank Bo. In order to compete with start-ups like Monzo and Starling, RBS has been preparing for the launch of Bo, spending almost £100m in developing the bank.
The digital bank was launched earlier this month, but publically came out on November 27. Bo operates on a separate IT system to its core RBS and NatWest brands. As per the CEO of RBS, Mark Bailie, the taxpayer owned lender has to respond to the rapid growth of digital challengers as “regardless of what people think of those business models…customers clearly like them.”
With the advancement in technology and changing business models, the digital banking sector is growing at an alarming rate. To enhance customer experience, digital bank Bo will offer current accounts via its app, along with a bright yellow payment card.
Post launch on November 27, RBS has successfully signed up more than 3,500 customers and hopes to increase the number after the launch of an advertising blitz in 2020. As stated by Mark Bailie, Bo has been specially made to target the three-quarters of British residents who have “financially unsustainable” lives with little or no savings.
With its new digital bank, RBS is hoping to attract customers who have remained cautious about trusting a digital-only bank earlier. Previous records state that even large UK digital banks such as Monzo, Starling and Revolut have remained in losses. A common challenge witnessed by all is to encourage customers to use their account as their primary account. On this front, Bo is confident that the returns from lending deposits will allow Bo to be profitable, despite being used as a secondary account.
Speaking at the launch of Bo, competitor Monzo’s CEO, Jonas Templestein said that he wasn’t really concerned about the impact Bo will have on Monzo’s growth as he was confident that they have already created a positive shift in the industry. He added, “It would be foolish to present them having [millions of] customers already are not a bit of an advantage. But equally I think there’s some advantages we have.”
Earlier this month, RBS launched another business-focused brand, Mettle which issues a black debit card. Announced as a standalone business digital offering with chief executive, Marieke Flament, who used to run the European operations of payments and cryptocurrency firm Circle. In comparison to its parent NatWest’s existing offer, Mettle doesn’t charge any fees from its customers.
In direct competition, HSBC has announced plans to launch “HSBC Kinetic” as a new app based business banking service. For its early sign ups, HSBC is promoting Kinetic by a £100 Amazon gift. As of now the app will have only digital banking features like automatic categorising transactions but will be having advanced cash flow predictions to make financial health management easier for companies.
Despite its early launch, RBS’s digital bank Bo misses out on some features. It does not offer any interest on savings, can’t pay direct debits and there is no loan service. As the digital banking market is growing every day, it would be tough for Bo to maintain popularity!
OPEC Meeting Sets Curbs at 500,000 Barrels as Oil Prices Rose
Two days of OPEC meeting in Vienna, led the Opec alliance (including Russia) agree for a curb of 500,000 barrels per day on Dec 6. After aggressively shaking the oil market, Saudi Arabia has pledged additional voluntary cuts of a further 400,000 b/d. Despite warnings…
Saudi Aramco Glides its Way to Success with World’s Largest IPO
Last updated on December 7th, 2019 The Initial Public Offering set to take place next week will posit Saudi Aramco as the only firm making the world’s largest IPO. In making its market debut, the state-owned firm will raise $25.6bn (£19.4bn) and emerge as the…