RBS closes digital bank Bó six months after launch

via FinTech Futures

RBS has announced the “wind down” of its digital challenger bank , which will be merged with the bank’s small and medium-enterprise (SME) challenger bank Mettle.

The bank said it “will wind down Bó as a customer-facing brand” in its Q1 2020 results. “The technology used in Bó will be integrated into Mettle as it is developed.” Customers will be given “at least” 60 days notice before their accounts are closed.

Bó was launched just six months ago and accumulated 11,000 customers, most of which were “friends and family” which the bank says it will “continue to support”.

In February, RBS announced the appointment of Mettle’s CEO Marieke Flament as CEO of Bó, signalling the start of an official wind down. Its chief product officer, Ollie Purdue, also left the digital bank on 21 April.

Chief executive at RBS Alison Rose told Yahoo Finance UK that “the circumstances have changed”, suggesting coronavirus had a part to play in Bó’s closure.

“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.”

Rose says the greater “opportunity” is in the small business market at the minute, and points out that Bó was always more of a test for the bank than a target-driven venture.

“Bó was something we were testing and learning from,” says Rose. “It was launched in the app store but we never undertook a consumer launch or introduced any type of acquisition targets.”

But despite Rose playing down the importance of Bó, it’s clear the bank did initially have big plans for the challenger.

Then chief executive Mark Bailie told the Financial Times in April 2019 that RBS was aiming for “a few million” customers within five years of launch, and that the bank was taking the project “very seriously”.

It seems the challenger struggled to ever gain momentum. In February, it had to re-issue 6,000 cards to customers due to security issues in conflict with the extended Strong Customer Authentication (SCA) deadline in March, which fellow challenger banks such as Revolut and Monzo had addressed after the initial deadline in September 2019.

The security oversight meant the challenger had to reveal the number of customers it had, which was lower than many had expected.

Rose denied that Bó was a failure on a press call, and said its team has done “an excellent job”.