RBS plans on opening a digital challenger bank

(Graham - Mental health professional) #43

The first legacy bank to launch instant notifications will surely put the cat amongst the pigeons.


I’m not really too concerned about how the bank runs their business in some sense. I wouldn’t use them if they were invested in animal cruelty or aggressively hounding vulnerable customers who are in their overdrafts but otherwise I honestly don’t think about it/really care that much


Well, there are limits to every statement.

I didn’t mean to imply that. But I hope we don’t compare running a bank on cobol as equivalent to blood diamonds, etc…

( related to Monzo CEO, Investor in Monzo ) #46

lol - I was just reading your “I personally really don’t care how my bank runs their business.i care that they provide what I need”


Agreed. Were you at / have you seen yesterday’s open office? Tom referenced a few core infrastructure-y things (my term not his) that Monzo needs to address. Paying in cash / international transfers were the two I remember. I think there might have been a couple more.

For me, Monzo has reached my personal “minimal viable bank” (and exceeded it in some places). Which is why I’m using it. But I’d never suggest others use it if it doesn’t meet their needs - that’d be bonkers!

(Graham - Mental health professional) #48

As long as it’s free-range Cobol?


I meant to add: the day may well come, when being legacy is a disadvantage for the legacy banks, because they can’t keep up with the more modern competition. And when that happens I’m the first to switch over.

But we are not there yet.

Amex has instant notifications. Not a bank, of course, but still

To make this clear (and I thought I had I implied this already): my statement should not be taken to this extreme. I would not knowingly do business with businesses that finance themselves through blood diamonds, for example. But this is not what we are talking about here.


That’d be odd!

There’s nothing wrong with Cobol per se, but (without wanting to cause a language war) it is largely associated with mainframes and batch-processing, which are not to everyone’s taste and can be difficult to iterate on. Given that Cobol code can be also be quite old, it does tend to suffer from technical debt, making it more expensive than it would otherwise be.

It wouldn’t be my first contemporary choice - but I wouldn’t necessarily light the pitch-forks either (depending on cost / application etc etc).

(Graham - Mental health professional) #51

I’m pretty sure you did make it clear. This is a good thread - reasonable positions and a healthy challenge to the status quo.


For me that will be reached when they have SCT and perhaps SWIFT. I am not concerned with mortgages or safety deposit boxes, etc. But being able to make and receive payments is a necessity.

Until then only Monese and Starling are a minimum viable product.


Perhaps I ought to have said “minimal viable day-to-day bank”. I’ve always tended to have multiple current accounts, and maintain a packaged account for the benefits, cash and cheque handling, and international transfers. But my salary, direct debits etc are all Monzo driven now. :rocket:

The notion of having just the one account - which I think seems to be quite common - makes me nervous!

(Christopher) #54

Apologies Nano! Perhaps I wasn’t clear, but this is precisely one of pillars at the heart of the legacy debate and the challenger opportunity. Social responsibility and good corporate governance have been in short supply with many legacy banks both here in the UK and globally. Specifically, wrt RBS, I was talking about the opportunity the Monzo have in differentiating themselves from a business that has serious form in hurting it’s own customers.

Sure, we aren’t talking blood diamonds here; but it amounts to same thing. Socially harmful, unethical behaviour which has resulted in significant financial loss, loss of trust and even loss of life.

Without wanting to go too off topic, here is the full unredacted report on RBS’ treatment of customers, in case anyone in interested in an aspect of legacy banking that isn’t blood diamonds and arms dealing.

(Dan) #55

Wish I could like this twice.


Well, “amounts to the same thing”? I don’t want take what they did lightly, but I think there is quite a different level of evil when it comes to blood diamonds.

However, more to the point: is this really a question of “legacy” vs “challenger”? I don’t know about that, but it seems like a bit of an over generalisation and over simplification.


Indeed, there isn’t really a legacy vs. challenger when it comes to business ethics - there are plenty of what would be termed ‘legacy’ banks on this forum that take a more ethical approach to business than the HSBCs and RBS’ of this world.

I fact, I don’t find the terms applicable to many situations - they’re all just banks, and we as consumers are able to make our own choices about which to use based upon our own criteria. I suspect ‘age of core banking system’ (which is where i think the legacy terminology has originated) is quite low down on most people’s lists.


Indeed. And let’s not forget that most challenger banks are by nature young, and have only just started lending money, which is when unethical behaviour has usually started in banking. Give them a few decades (or centuries in the case of RBS), and sadly I’m pretty sure some of them will catch up on unethical practices…

(lee) #59

Wont it just Graham!

Don’t get me wrong i’m the first to moan about aspects of legacies when they’re poor. BUT i think there’s a common misconception that everything they do is junk - and i don’t believe thats the case. Not to mention they’ve an entire product range which could be integrated. They just need to improve.

Course they’ve been lazy and not very innovative because they’ve not really had to compete. But i think that is starting to change. Plus they’d likely have enough funds from closing just a few branches to either buy a newcomer, launch their own or use marketing spend on attracting/retention.

This was very interesting info to come out of event yesterday.

According to the live counter there’s roughly 600k accounts live. But as present only 15% are having salary paid into. I doubt starlings % is wildly different either.
And these/we are early/early’ish adopters - who might just early adopt a natwest (insert other bank here) startup instead?

(Alex Sherwood) #60

12 months ago ‘no one wanted current accounts’, 6 months ago ‘no one was going to make Monzo their main account’ & now it looks like 1 in 5 Monzo users will be using it as their main account in a few months, before the marketplace (which I predict, will be the main driver for users to switch), is anywhere near finished :popcorn:

Can the legacy banks get the tech before the challengers scale? It’s goint to take Lloyds 3bn & 3 years to build their digital bank and who knows how advanced that will be or where challengers will be by then..

(apologies for the late edit)


And legacy banks would love to grab some fintech. Fidor (Germany and UK, the latter has quarter of a million customers) has about double the number of customers to Monzo yet has already been snapped up by a legacy bank (French in their case). So even if Monzo don’t want to sell, as they approach 1,000,000 customers I am sure banks from Spain, France and elsewhere will be interested in acquiring them if they change their mind.


Agreed. It’s not popular, but the key to getting this right is to understand what users will need, not what they want

The (apocryphal?) Henry Ford story about if he’d asked what his customers want (answer: faster horse) refers…

Edit to include a quote to make it clear what I’m agreeing to after @alexs’s edits!