RBS plans on opening a digital challenger bank

(Richard) #104

This wasn’t the challenger bank…

(Caspar) #105

That’s a quote from the Guardian article.

(Richard) #106

Ok, bad wording on my part… this wasn’t the digital challenger bank.

They had originally intended to spin this bank out ages ago, but they never did. However they are working on a digital challenger bank right now.



Yes, that wasn’t the challenger bank, but as they own the trade name they could still use it as the brand for the new entity.

(Izzy) #108

Whether or not RBS are building a digital or a legacy challenger bank, the truth is the underlying infrastructure is too old, process are long winded, far too much management and not enough skilled workers (anyone with any real skill has been made redundant or left)

From my lengthy time and experience at RBS, I will be amazed if anything comes of it…

(Andre Borie) #109

I would say the real problem is their legacy mindset. The skill problem can be solved by throwing enough money at the problem and hiring good engineers.

Unlike the current challengers (Monzo, Starling, Revolut, Loot, etc) who built their business to solve the problem of awful legacy banking, RBS wants to build a challenger just for the sake of having one and trying to get all that juicy money (see Revolut’s valuation for example) - they couldn’t actually care about the experience nor solving a real problem, and this is why they’re gonna fail.


but the ‘legacy’ banks have the millions of customers behind them who, for the most part, will be getting something new and modern they otherwise wouldn’t have known about. This is why they will succeed. CASS may exist but people tend to stick with their own banks.

(Izzy) #111

They have done the ‘throwing enough money at the problem and hiring good engineers’ for the W&G project…

(Andre Borie) #112

But as far as I understand the plan for their challenger bank is to be a separate brand, so as far as their existing customers are concerned they’d still need to switch banks to take advantage of it, at which point they might as well go with Monzo or Starling.

(Valeri) #113

How does that even make sense from a business point of view? Why not just gradually upgrade everything and just become one big high-tech modern bank? (With few legacy branches lying around for the elderly)

(Andre Borie) #114

Because what happened to TSB - I’m not saying a migration is impossible (I’ve done it before, but this was with a competent team and good software), but a big legacy bank with 40 years of old COBOL without documentation is not someone I’m gonna trust to get it right on the first try, so in their case I agree with the approach of using a separate brand.

To migrate everything to a new system you first need to understand what the old system does, and then make your new system behave the same way as far as the outside world is concerned (same APIs, same behaviour, business logic, etc) - this allows you pretty much do a drop-in replacement without changing any external components (mobile apps, third-party integrations, etc), and switch back to the old system in a second should problems arise. Once the new system is up and running, you can then start changing or extending it in any way you desire, thanks to the modern programming language and new design & development patterns (CI, testing, etc).

The issue with a lot of legacy banks is that nobody truly understands how the old system behaves because there is little to no documentation, making the above approach very risky.

(Valeri) #115

I think that is precisely why I said gradually - the risks of one big switch over are way too high… (as seen on TSB)


I must play Devil’s advocate here given RBS is my bank. The RBS app is iterating more and more and, this may come as a shock to you, is currently improving with each update.

Other than for Spending Analytics, the RBS app is better than Monzo in nearly every way feature-wise at present. Let’s just take one example of a recent update of receipts: Monzo you take a simple picture and attach it to a transaction; RBS on the other hand now does this…

Tell me again so assuredly that “legacy” banks will fail because I’m nowhere close to being as sure as you are.
Also, the Barclays app that my brother has is very good from what I’ve seen and they have Pingit which looks almost Revolut-like in what it can do. Don’t sleep on the big banks is what I will say because it’s too early to think Monzo can dent their competitive advantages, especially at its current slow innovation rate. The fact that the RBS digital-only app team will be separate from the corporate side should be worrying for Monzo.


Not just on paper but physically too in a totally separate building

(Jamie 🏳️‍🌈) #118

Because nothing screams 21st Century fintech digital challenger bank more than a brand from the 1970s.


I don’t particularly agree with your migration steps. I haven’t tried to understand what my old system does particularly, from my experience it’s data that is the fall over point nearly every time. I can agree to a point on the APIs but there are solutions to effect change around them, and in many ways sometimes those integration points have to change as the data structure between old and new is so different.

To do a phased transformation as you suggest (l think anyway) sometimes isn’t always possible, and it is quite possible that could be one of the issues for TSB. When everything has to change in one step is risky and generally something that needs a lot of money thrown at it (which has been suggested maybe something that TSB didn’t do. (Post edit: This paragraph is probably the more relevant of the two! We probably work with different systems so l wasn’t being rude on my first paragraph)


I wonder how they are going to do this? If anoyone here has banked with RBS and Natwest, they probably know that Chip & Pin operations clear into the account really, really late. And when you set up transfers over the phone or in your mobile app, sometimes it will only give you a reference number for the transaction without telling you who you paid to or the concept (even if you ask for a bank statement).

I guess they would have to start some things from scratch. At least they had already set up forums like this one (not so open with speaking about other companies though).


Literally just posted about this. See my previous post. Have you experienced something similar?


They are. RBS have set up an office separate from their other operations to work on the design of a totally new fintech bank, which will be part of their group but not use legacy systems.


I think it will take them quite some time to achieve what other challengers have achieved by now.