RBS fights digital rivals with trendy banking app

Boss admits branches at risk from Bo launch

NAtWeSt owner royal Bank of Scotland has launched a new digital bank, Bo, to fend off startup rivals such as Monzo and Starling.

But it could spell bad news for traditional Natwest customers, as rBS hopes Bo will give it an excuse to close more branches and call centres.

Bo’s management want Natwest account holders and new customers to switch to the new bank in their millions, opening up accounts through their mobile phones and piling in deposits which rBS can then use for activities such as mortgage lending.

Because Bo offers so many features through its mobile phone app, rBS believes that it would limit the need for branches and call centres.

As the digital bank was launched yesterday, its chief executive Mark Bailie (pictured top right) said: ‘Our customers can serve themselves and don’t need to use services like call centres or branches.’

He confirmed this could lead to fewer rBS branches, which operate under its brands including Natwest and Ulster Bank. rBS, now led by chief executive Alison rose (pictured above left), who took over earlier this month, has already been cutting locations.

Almost three-quarters of the 3,303 UK bank branches which closed between January 2015 and August 2019 were owned by rBS.

rival lender tSB announced earlier this week that by the end of next year it would close 86 branches, which amounts to one in six of its network, in an urgent cost-cutting drive.

James Daley, the managing director of fairer finance, said last night: ‘We all know branch numbers have been declining, but banks have been terrible at managing that in a way that’s fair to communities and the vulnerable members of society who depend on their services. We can only hope that rBS hasn’t launched a digital bank with the express purpose of shrinking its branch network.’

Many of the calls which Natwest receives from customers concern lost debit cards, unrecognised payments on bank statements and queries as to whether a payment went through.

But Bailie is confident that Bo will allow its users to solve these issues themselves.

the app has a switch which allows customers to lock their card if they lose it, rendering it useless, and order another.

And account holders can see a list of their transactions on the app, along with a map of where the payment was made, meaning it should be easier for them to recognise and remember legitimate payments. Added to that, a notification appears on their phone when money leaves the account, erasing questions as to whether a payment has been made. Because Bo does not rely on staff in call centres and branches, accounts are much cheaper to run than those under rBS’s other brands.

If Bo does take off in popularity, rBS could slash its costs by closing sites.

Speaking last month, its chief financial officer Katie Murray said: ‘In terms of branches, we have no plans at the moment to make any changes to our footprint as we move forward.’

Bo is targeting the 75pc of Britons who it believes have a ‘broken relationship with money’, either because they spend everything they earn, or end up in debt at the end of every month, according to analysis of Natwest customer accounts.

Bailie believes that by setting a budget on the Bo app, which helps them to track their spending closely, ordinary workers will save more money regardless of their salary.