Atom Bank, 'a bank in your pocket', plans to launch in the UK later this year after being granted its banking license.
The Durham-based bank, which will use only mobile apps and won’t have any branches or even a website, secured its licence from the Bank of England. The bank will offer a full range of banking services such as current accounts, personal lending and mortgages to both individuals and small businesses.
Customers will be able to open accounts and carry out all their banking activity directly from their smartphone. The one-year-old start-up has put technology at the forefront, hoping to use 3D and gaming technology for its app, as well as biometric security.
CEO Mark Mullen said: “We’ve set about designing a banking app that’s in tune with how people think about their money. Taking an app-based approach allows us to use all the features of your mobile device to provide a slick and highly personalised experience.”
The bank is one of several challengers to emerge since the financial crisis in competition with high-street rivals like Barclays and HSBC. Other new entrants which might disrupt the traditional workings of banks are Metro Bank, Virgin Money and Aldermore.
Around 100 people currently work for Atom, with 60 more jobs to be created this year at the head office and call centre in Durham. The lender is targeting 18 to 34-year-olds, but added that this type of technology would appeal to a broad range of people beyond this age group.
“It is entirely possible if you are brave enough and good enough to transform the industry,” Mullen said. “Trust in banks is pretty low and the customer needs to have a better experience.”
Last week, Royal Bank of Scotland suffered an embarrassing IT glitch that saw 600,000 payments fail to go through to customers. The industry has been dogged by such failures, as ageing IT systems become ever more complex.
“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, we are not in a hurry to launch,” Mullen said.
Atom Bank is likely to partner with a High Street bank to allow customers to pay in cheques and cash to their accounts and Mullen told Business Insider they are already in talks with a prospective partner. The bank will eventually have a website, but it will break away from the traditional model of doing online banking.
“The likelihood that we'll put our bank online in any traditional way is very small. We'll let our customers download an app to their desktop. There are advantages for us from a data security point of view, operating it as an app,” Mullen told Business Insider.
“Attitudes to banking are changing much quicker than any of us could have expected. There's a whole generation of people for whom apps are the internet.”