Atom Bank: Splitting the Industry

Atom Bank is the first of four U.K. Challenger Banks to launch (Albeit in a very limited way.) But check out its website and you’ll see a vibrant, fresh perspective on delivering banking services. The design is cutting edge and incorporates face and voice biometrics to log in. The copy is a tad irreverent compared to the labored, compliance-heavy tone of traditional bank websites. And the overall experience is light, youthful and fresh — just what founder and CEO, Mark Mullen, wanted to convey.

Mullen has described the U.K.’s legacy banks as “insidious and self-interested” and promises that Atom will be dedicated to “providing a better value, greater transparency and a much more innovative banking experience.”

[Atom Bank will be dedicated to] providing a better value, greater transparency and a much more innovative banking experience.
— Mark Mullen, CEO, Atom Bank

While Mullen’s words ring a little of the hubris of start-ups and are directed at traditional banks in the U.K., they resonate with the current issues facing community banks on this side of the Atlantic.

Millennials in the U.S., like their British counterparts, do not perceive community banks to be technologically advanced or capable of providing a quality mobile experience.*

We might be able to continue ignoring this slap in the face if it weren’t for the fact that the quality of the digital experience is becoming increasingly important in consumers’ choice of banking providers. According to research conducted by Galapagos earlier this year, it is poised to trump convenient branches as the number one factor for millennial customers in selecting a banking provider.

Time is of the essence

The gravity of this situation hasn’t been fully realized yet, as only two million of the 37.5 million checking accounts opened in the U.S. last year were opened via smartphone or tablet**. But this number is sure to rise dramatically in the near future.

For companies getting the digital experience right, the reward is significant. Leading U.S. mobile banking provider, BankMobile, for example, who has pushed the envelope in targeting specifically younger customers, saw prodigious growth in 2015, quadrupling its target of 25,000 accounts in its first year. The bank is projecting over two million customers by July of this year, fueled, in part, by its acquisition of Higher One Inc.’s student checking and refund disbursement services business.

BankMobile is not handcuffed by the limitations of the online and mobile banking applications of legacy core systems providers. Nor does it have to operate within the constraints of a traditional community bank brand. Instead, it employs the mobile banking app from Malauzi Software, Inc. The platform provides some technology advantages, such as Photo Enroll, Photo Bill Pay and Deposit and debit card controls, and provides customers with a clean, easy to use interface. But perhaps the app’s most striking feature — its ability to fully assume the bank’s brand — has the biggest initial impact, immersing the customer into a compelling and contemporary experience. Looking at the brand’s presentation, there is little doubt that BankMobile can deliver what the customer wants.

Until recently, community banks perceived the biggest hurdle to attracting new, younger customers to their digital channels to be keeping up with technology. That certainly remains. But there’s more. Can a traditional community bank brand convey a quality and distinctive mobile experience and engage new customers? We think not.


*Accenture: North American Consumer Banking Survey, April, 2015.
Galapagos Consumer Banking Channel Preference Survey, January, 2016.
**Aite Group, Digital Account Openings: U.S. Market Sizing, November, 2015.