RBS plans on opening a digital challenger bank


I wonder if they will use their Williams and Glyn’s brand for this new venture? Can’t wait to see if they support Samsung Pay!


This is the best way (in my view) of a big corporate reinventing itself. It is dependent, though, on the new unit being completely autonomous and agreement on both sides that it should be fighting for - and ultimately stealing - its parent’s lunch…

(Oh and usual disclaimers about the challengers’ competition not being each other but the big incumbents apply here, too…)


One thing I keep noticing with this and similar articles is that Starling rarely gets a mention…which is surprising consider the recent award they won!

(Jolin) #26

Yes, once the internal startup succeeds in creating a great modern bank, RBS can just transfer their existing customers to it through an IT migration. :grin:


Agreed, though I’m not convinced that these things are necessarily zero sum games where the new digital-only bank created can only thrive at the expense of its parent RBS.

In the current corporate world, many complimentary big name brands are thriving subsidiaries of an umbrella parent company e.g. Unilever.

I see no reason why RBS as the parent couldn’t own a digital-only subsidiary, an online robo-adviser, NatWest, it’s own operations etc all under one roof but targeting different audiences successfully.



I’d suggest just running them as separate businesses - no migrations! #PoorTheTSB


There are different people with different needs, so digital banks won’t be for everyone.

But, at the moment, the market is mostly “one size fits all” with most folk having an account with an incumbent (which are all fairly similar in approach). So banks with new ways of doing things almost certainly likely take from that market share. In this example, it’ll be interesting to see how they approach the marketing - whether they go for existing Natwest customers exclusively (as implied by this article) or cast their net wider.

I think the example of First Direct from Midland Bank is a good one. I’m assuming that FD didn’t get just cannibalise Midland’s market share…

In the future, I think we might see more specialised types of bank, focused around logical segments of user needs…


I think one of the main advantages of an RBS “digital bank” might be the option of desktop apps though, which may sway people away from Monzo or Starling

(Christopher) #30

I see Monzo and Starling as resultant products of the systematic failures and breaches of customer trust brought about by the likes of RBS, HBOS, etc.

There’s certain irony in RBS forming a digital challenger to effectively stifle the competition. Let’s hope Monzo and Starling seize the opportunities to deny the legacy banks a chance to make in roads.

I’d like to see Monzo to engage in some serious, smart marketing to differentiate it from the likes of RBS and grow the customer base, by playing to its strengths precisely because it isn’t legacy.


That in itself is barely an advantage. If I have a choice between a “legacy” bank offering a fully working bank account, with all the features I require, or a “new” bank that is just slowly playing catch up because it needs to re-invent the wheel at every step, I know what I prefer…

(Christopher) #32

This is interesting. Customers considered less financially literate = barely making ends meet = higher risk > migration to an ultra pared back bank account / ‘essentials’ brand? Dare I say it, essentially Monzo?

As those customers are already banked within the group, there should be some pretty deep insight on behviour and risk metrics, yet the bank won’t offer products directly? Something that I imagine Monzo lacks is customer relationship, history and patterns that deliver the right insights to make sound credit risk decisions.

Does open banking provide an opportunity here for Monzo so collect this data retroactively to make better lending decisions?


With fintech’s solution to joint accounts being a square wheel I expect!


I’m not sure that that is a fair and balanced characterisation.

I think it’s fair to say that different people have different needs in a bank. Some folk will need a branch to transact in person, or to have a way of handling cash. Some people will need specific product sets or features (business accounts, joint accounts, offset current accounts etc). And some will want to live their lives on their mobile and bank in a different way to how things have been previously done. Each are equal in value and equally valid.

It sounds to me that - for your use case - Monzo (or Starling or possibly this RBS challenger - although who could tell at this stage in the game) isn’t for you. And that’s fine.

For me, the attraction to something like Monzo is the ability to step bank and fundamentally rethink what a bank is. You seem to have a very different view. And again that’s okay, but I think we need to be balanced and agree that different people will have different needs.

To move this more firmly on topic, I think that a digital challenger bank as part of the RBS stable is actually quite a canny move - if they can pull it off. If they can segment the market into “consumerised branch based banking”, “specialist / personal banking” and “online/app based” then I think they might be onto something.

(I haven’t gone RBS native, btw - I think they will still have significant disadvantages over time compared to Monzo et al in the digital segment :wink:)

(Christopher) #35

Nanos, from a product point of view I agree with you, which is why I cannot switch to Monzo for my day to day or complex banking. Monzo do have a lot to catch up with but it is a start.

But for me the legacy vs. challenger debate is about more than hard product. As a client and an investor, innovation, agility, customer service and crucially, trust are all priorities for me, especially in a world still living in the shadow of the Global Financial Crisis.

Let’s take RBS and the egregious behaviour of their GRG. The outrageous antics of that business unit cost people their homes, businesses and even lives. There are scores of examples that have really harmed many, many people from retail banking to IB.

It should be a point of difference that Monzo isn’t that sort of bank. It’s built from better values, on better technology by better people.


In the end of the day I personally really don’t care how my bank runs their business.i care that they provide what I need.

But, obviously, as investor you will have a different view.


Well, you may not like my view, and you may have a different one.

But surely I can choose my priorities as I wish? It is a fact that challenger banks (in particular Monzo) don’t provide some features that are important to me. That they are hip, and cool, and using the latest technologies, and use emoji, and whatever doesn’t change that, and features are more important to me, than methods. And, again, surely I’m free to set my priorities as I see fit?!

( related to Monzo CEO, Investor in Monzo ) #38

somehow I doubt that - or I hope you aren’t being serious about not caring how a business you use runs their business as long as they give you what you want :slight_smile: :slight_smile: :slight_smile: lol how many bad business examples could be given for you to say I don’t care what they do as long as I get what I want … blood diamonds , petrochemical plants, deforrestation companies, tobacco companies, arms companies …the list goes on and on :slight_smile:



I’m sorry if the point of my post got lost - that different people have different needs. And that’s it’s okay that Monzo doesn’t meet yours.

Different horses, different courses! :racehorse:


Yes, all the emojis under the sun doesn’t make up for lacking basic banking services like international transfers, secondary accounts and cards, joint accounts…but despite that I have total confidence in Monzo getting there, it is just a matter of when. Are they the financial equivalent of a tortoise or a hare?


I have actually met people who genuinely feel that way, so don’t be surprised.


Yes, not disagreeing. My point is: legacy or not doesn’t matter for me. What they offer do.