RBS: Bó’s closure highlights traditional banks’ digital deficit
The digital bank struggled to make an impact in a fiercely competitive field.
Bó, RBS’s digital bank for retail customers, announced in early May it was to close after just six months in business, with only 11,000 customers.
RBS’s digital bank for businesses, Mettle, will continue to operate.
Digital solutions are thriving as more people are forced to work from home.
In March, Skype saw a 220% increase in Skype-to-Skype calls, with 40 million active users each day, and Zoom boasted 200 million active users per day – up from 10 million just a month before.
It’s a similar pattern when it comes to banking.
Research by fintech company Nucoro shows that between March 14 and April 14, 12% of the adult population in the UK – around six million people – downloaded their bank’s mobile app for the first time to access their financial information amid the coronavirus lockdown.
So why did Bó fail?
Creating a digital-only bank from a parent firm weighed down with legacy problems – no matter how tech savvy the bank may claim to be – was always going to be a challenge, particularly when faced with well-established and effective competition.