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RBS bids farewell to app-only offshoot Bó

RBS bids farewell to app-only offshoot Bó

Royal Bank of Scotland is to wind down its digital challenger bank Bó, just five months after launching the app-only brand.

In a brief statement tucked away at the tail-end of its Q1 result, the bank states: "RBS will bring Bó, our personal digital account, together with Mettle, the digital bank for SMEs. As a result, RBS will wind down Bó as a customer-facing brand. The technology used in Bó will be integrated into Mettle as it is developed."

Eighteen months in the making, Bó was finally launched in November last year following a £100 million spend. Intended as a direct competitor to new digital banking brands like Monzo and Starling, Bó struggled from the outset to make meaningful headway and currently serves just 11,000 customers.

Chief executive Mark Bailie - who had staked his reputation on the project - was ousted in January and the company was forced to re-issue 6000 cards after failing to account for new EU rules.

“The circumstances have changed,” chief executive Alison Rose told Yahoo Finance UK on Friday. “We’ve always said that we will look to innovate. Clearly in the current situation we’ve had to make prioritisation choices around where we should invest and what we should do to support our existing customers.”

The shuttering of Bó comes as the bank reports pre-tax profits of £519 million for the period, down from £1 billion the previous year as it set aside £802 million to cover anticipated credit losses from the global pandemic. Strategic costs of £131 million include a £39 million charge related to technology spend and a £34 million direct charge in NatWest Markets in respect of restructuring activity.

Comments: (2)

A Finextra member
A Finextra member 01 May, 2020, 15:063 likes 3 likes

A case study to endorse why banks' smartest strategy may be to stand aside, let fintechs do the innovation.

And then buy them when/if they have critical mass.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 04 May, 2020, 10:351 like 1 like

That resonates strongly with the FI Innovation Playbook in my post titled Fintech Shouldn’t Stop Chanting The Disruption Mantra:

Don't drink the Kool-Aid of every shiny new technology; Wait and watch for fintech winners; Buy / make only what works. This playbook has several success stories e.g. eCount in Prepaid Card, Revolution Money in Gift Card, Simple in Neobank, and Zelle in Online & Mobile Account-to-Account Payments.

And, going by Covid-19 will reset fintech market valuations; spur M&A, the fund squeeze has come, likely increasing the number of fintechs available for purchase by banks.