NatWest bank has launched a digital bank called Bó, aimed at taking on the host of app-only banks that are eating into the market share of high-street lenders.
Bó is a cloud-based bank with its own faster payments connection, and comes with a distinctive yellow Visa credit card. The app went live today in the App Store and Google Play.
The move comes after a wave of digital banks such as Revolut, Monzo and Starling Bank, have launched in recent years racking up millions of customers between them in a relatively short period of time.
These challenger banks, established in the aftermath of the 2008 financial crisis, offer small firms better terms and higher customer service standards than high-street banks, who cut their lending to small businesses during the crash, fearing defaults.
Tracking spending patterns
The response of high street lenders to digital banks has been to upgrade the main brand’s online offering, buy fintech rivals, and launch digital offshoots.
NatWest, which is owned by the Royal Bank of Scotland, said it tracked the spending patterns of an anonymised group of 2.6 million of its customers in July to help set the bank.
It found that half of these customers spend everything they earn, and an additional quarter consistently spend more than their income.
NatWest, which has 14 million customers, said its new app came with money-saving features, designed to “replicate the behaviour of successful savers, with input from experts in behaviour change and money management”.
NatWest said Bós’ features include instant spending alerts, bespoke household budgets, and access to Visa travel money exchange rates.
Bó chief executive Mark Bailie said: “As we’re part of NatWest, people can rely on Bó to keep their money safe. But as a digital bank, built entirely on a separate cloud-based technology, Bó is also able to harness new technology and develop rapidly in line with our customers’ needs and expectations.”
Earlier this month, HSBC began testing its new app-only bank Kinetic, aimed at small businesses.
It promised small firms who signed up early for the service would not face monthly charges during testing as well as a free £100 Amazon eGift card.