Atom chief launches ferocious assault on 'dinosaur' banks

Atom chief launches ferocious assault on 'dinosaur' banks

The 'dinosaurs' of the banking establishment - lumbered with antiquated technology systems and ruinously expensive branches - will be brushed aside by nimble, mobile-led competitors says Anthony Thomson in a hard-hitting speech ahead of the launch of his digital-only challenger Atom Bank.

Thomson's ferocious assault on the traditional banking system comes as Atom Bank, built from the ground up to handle customer interactions from end-to-end in a purely digital format, prepares to welcome its first customers in December.

The former Metro Bank chairman pulled no punches in his talk at the Centaur festival of Marketing at London's Tobacco Dock.

"Banks are mired in the legacy of old IT systems that are bad," he told his audience. "The first automated banking system was introduced by Coutts in 1967. The joke is that they are still running on it today.

"Banks are trying to be cool and hip and build super cool digital front ends and say they will compete with Atom. But it’s like putting lipstick on a pig - ultimately it’s still a pig and the new front end is still running into an awful digital back end."

He says that Atom Bank will break the mold, taking a "telepathic" approach to anticipating and meeting customer needs. As an example he points to the use of behavioral tracking to provide customers with bank statements two months in advance based on past spending patterns.

"Why would I start a bank?" he asks. "Nobody likes banks or bankers. I’m not a banker; I’m a marketer and entrepreneur. Banks are mired in the legacy of real estate, of branches in places nobody goes, and none in places they want to be, because we don’t want banks in shopping malls, we want nice shops."

With no real estate overhead, nor massive maintenance spend on legacy IT systems, Thomson says Atom Bank intends to grow into a £5 billion balance sheet business in five years with just 340 full time staff.

"Metro has that size balance sheet with 2200 people," he says. "So yes this is a realistic issue for banks."

Comments: (10)

A Finextra member
A Finextra member 13 November, 2015, 17:201 like 1 like

One can certainly tell Mr. Thompson isn't a banker, otherwise he would know that his speech echo's that of many others about a decade ago when unknown brands launched online banks with the same claims. 

What a real banker would know is many of them no longer exisit because a) banking is about trust and those "dinosaurs" he speaks of, have built that up over decades and he hasn't, and b) those runiously branches he thinks are a waste, happen to be where the majority of sales are derived and where customers feel "safe."  These are challenges no slick Mobile App is going to overcome.

He still has a point however as research on Digital Natives and upwardly mobile Millennials show this is the way to capture the future wealth market, so what he is doing makes perfect sense.  The quesiton is, is his timing good?

Tim Osler
Tim Osler - GFT - London 14 November, 2015, 00:42Be the first to give this comment the thumbs up 0 likes

Good points Kevin, and I wholeheartedly agree about the issue on trust. As a middle-aged Marketeer, I still like the idea of a place I can go and deposit my to some 'real' people, and negotiate on mortgage and fees.

But..I also love the usability of the disruptive taxi app called Uber, and am also addicted to my iPhone!

Can Anthony create the Uber of banking? Delivering what I want, when I want it, and at a cheaper price than the dinosaur competition, and maybe give me a complete financial overview of savings to loans to mortgae to investments?

I met with the founders of the German bank called Fidor...totally online and where the customers can 'vote' on the rate of interest they all receive! Some unheard of cool ideas and completely customer focused.

I don't know who will win out in the end, but I am sure Anthony only needs to convince a small percentage of likeminded Millenials to join his bank and he will be on to a winner.

I can't help thinking what will the 'Bank of the future' look like?



A Finextra member
A Finextra member 16 November, 2015, 07:431 like 1 like

The trust Mr. Johnson refers to had indeed many years ago something to do with the bank brand. Helas, since 2008 TRUST for people means banking with a regulated FI, so that when things go wrong (part of) their money is secure. Bank brands simply build affinity and cultural bonds these days and Atom as such will attract a crowd, drawn in by 21st century offerings and services. As for the other millions who bank with other banks? We are simply too lazy and not enough disatisfied to move... Here is a marvelous opportunity for the coaltition of the willing and the next generations, who simply cannot understand how we still manage to abuse the word trust when we all know that the system and us as a collective are the only security beneath it all.

Dharmesh Mistry
Dharmesh Mistry - AskHomey - Reading 16 November, 2015, 09:13Be the first to give this comment the thumbs up 0 likes

Agree with Connie.

Yes banks have to do more than just launch a digital brand, look at Cahoot, Egg, Smile.... all these were "digital" brands but hardly have rocked our worlds.

However anyone with reasonable savings isn't goig to move their nest egg or life savings to a new unknown brand that easily, thats way Lloyds ads of 250years in banking are very clever. It may well be that lending and current accounts move because there is less to lose as a customer.

To make the current account profitable apart from reducing costs the bank will have to be a better "infomediary" and sit between buyers/sellers providing real value. The products sold may be FS, they might not be. Exciting times and certainly VERY different to the original Internet bubble.

Dharmesh Mistry
Dharmesh Mistry - AskHomey - Reading 16 November, 2015, 10:56Be the first to give this comment the thumbs up 0 likes

Also quite sobering views from the "customer"..


A Finextra member
A Finextra member 16 November, 2015, 13:31Be the first to give this comment the thumbs up 0 likes

Right analogy. Pigs may not look good and new. But, a lot of us would love to have bacon for breakfast and grilled pork ribs for dinner.

Consumer Banking involves touching people's lives and be a key part of the important moments in their life. Technology (back-end in cloud, Analytics, Deep Learning, Mobile and Connected solutions) is vital but that alone cannot do  real banking. You need human touch & talk to be a part of the important moments in people's life.

A Finextra member
A Finextra member 16 November, 2015, 14:43Be the first to give this comment the thumbs up 0 likes As a dinosaur I'm sure he won't mind me telling him that tobacco dock is probably best associated with the failure known as the cheap jewellery king, Gerald Ratner. He took over just as his empire went to the toilet. And look what happened to TB.... Nothing. Just like Atom bank. Give it six years they might actually have a customer. I met one of their team at a conference where he was ridiculed for his dress sense by the other dinosaurs from London.
Richard Sanders
Richard Sanders - Hermosa Consulting - Southend on Sea 16 November, 2015, 17:26Be the first to give this comment the thumbs up 0 likes

I think it will be interesting when these new players are part of the current account switching service as to how many customers join them from this route and for how long. I also agree with some of the comments above regarding savings. It is interesting about the turnover of staff of some of these challengers before they even launch and also how some have left other challengers and set up on their own like this guy leaving Metro for Atom. Metro have realised they need branches and have also been innovative with e.g. drive through branches an idea the major banks apparently ditched many years ago. Its clear not all of these challengers will survive either, never mind the dinosaurs they dislike so much.

A Finextra member
A Finextra member 01 December, 2015, 09:26Be the first to give this comment the thumbs up 0 likes

and today there is news of the new bank Tandem.

The problem with those dinosaur systems is that they work, and there is only so much fancy stuff required to add up and take away. When his customers use a  BACS, Direct Debits and Faster Payments, they will be using technologies between 9 and 30 years old. They don't need to be changed at the whim of a marketing director (or security consultant) like the web, mobile, and branch front ends to those systems.

Dharmesh Mistry
Dharmesh Mistry - AskHomey - Reading 01 December, 2015, 09:36Be the first to give this comment the thumbs up 0 likes

However the challengers do benefit from better basics like having platforms that scale, don't process batch and are real time... If you left an established bank now and started from scratch would you have the same systems, people and processes with hindsight?