UK to get first digital-only bank

The former chairman of Metro Bank has announced plans to launch a fully digital lender, a remarkable volte-face considering that he had previously been known as a champion of physical, bricks-and-mortar banking.

Anthony Thomson, who set up Metro Bank in 2010 with co-founder Vernon Hill, said the world has moved on in the interim period.

His new project will be called Atom Bank and is expected to launch in the first quarter of 2015.

Mark Mullen, the former chief executive officer of First Direct, will join Thomson in heading up the institution. They are hoping to challenge more established banks, nearly all of which have been attempting to beef up their digital offering in recent years.

"Opening a bank in 2015 with branches would be like BT putting telephone kiosks back on the high-street," declared Mr Thomson.

The bank will be headquartered in the northeast of England. It is hoping to take advantage of the new fast-track clearance process, which is making it easier for smaller-scale rivals to established institutions spring up across the country.

According to the founder, one advantage his operation will have over its rivals is that many of them are still relying on out-dated legacy IT systems, which can cause major problems for customers when they fail to function.

"The difference is that we will be able to offer exceptional front end service plugged into a state of the art back end platform," he explained.

Atom will not have any branches for retail customers, with all transactions carried out online and via mobile phones. This kind of channel shift is something major banks will look at enviously, as they have been attempting to push customers in this direction with only middling success over recent years.

Last week the British Bankers' Association published new research showing that use of mobile banking apps set up by the five biggest British financial institutions increased two-fold in 2013.
v