Digital bank Bó will remain independent of RBS, and is aimed at customers with tight budgets who want to take greater control of their spending

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More people are adopting mobile banking


Royal Bank of Scotland (RBS) has announced the launch of a new digital bank, named Bó. Future Banking writer Sam Johnson speaks to Bó chief of staff Amelia Nicholls, who explains how the mobile-only app can help the financial institution tackle the crisis of consumer debt, while rivalling digital challengers such as N26, Monzo and Revolut.


In the UK, following years of hardship caused by the fallout from the economic crisis, 17 million people have less than £100 in savings. Meanwhile, collective consumer debt reached a colossal $6.532 billion in Europe. As many members of society continue to scrape by, subsisting from pay cheque to pay cheque, some have made the switch to mobile-only challenger banks.

The services offered by many of these newcomers allow users to receive real-time updates on their spending habits, while others also enable customers to bypass excessive bank fees when travelling abroad.

In its own response to this burgeoning crisis, Royal Bank of Scotland group has originated a new digital bank, named Bó, which is aimed at customers with tight budgets who want to take greater control of their spending.

Translated as ‘to live’ in Danish, this new mobile-only upstart could deliver a better quality of life by helping people to manage their finances sensibly through numerous methods of controlling spending. It also offers a digital alternative to the slew of challenger banks presenting genuine competition to their traditional rivals.


Digital bank Bó has a start-up mentality, but with the substantial backing of RBS

Bó chief of staff Amelia Nicholls says that when RBS conducted research on its customers, as many as 50% live to their means and spend every penny they earn each month. Indebted consumers, when hitting the inevitable bumps in the road, can turn to high-interest and high-risk payday loans. This precarious situation led Nicholls and her team to create the new digital-only service from a blank sheet of paper.

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Digital bank Bó will seek to hep customers take better care of their finances (Credit: Shutterstock)

“The benefit of this is that we’ve been able to almost get it right first time, and we haven’t inherited any legacy architecture or processes,” she explains. “The backing of RBS has been brilliant, it’s given us that added benefit of the robust control environment. But we’ve been using the positive relationship with regulators to our advantage.”

Nicholls reveals that the bank has been able to apply a ‘greenfield’ tactic to the tech build and construct an efficient micro-service architecture in the cloud, which has been assembled at a fast pace. According to the chief of staff, the high-speed start-up mentality of the bank drives creativity and is visible among workers throughout the fledgling institution.

“As chief of staff, part of my responsibility is recruiting employees for the business, and we’ve been able to hire some highly skilled people who believe in the social purpose of what we’re doing, and they’re also a good cultural fit for the business,” says Nicholls.

“We’ve built up a really robust talent pipeline, so that we don’t have the worry of staffing and losing people. We have a lot of people who are really interested in what we’re doing, and who are passionate and want to be part of the journey,” she adds.

“We have faced challenges, of course we have, and from my perspective, one of the biggest trials I’m facing is diversity, specifically in the tech space. Highly skilled female developers are hard to come by, and that’s one of the things I’m looking at and trying to address going forward. But all in all it’s been a really exciting journey so far; I’m thrilled to be here and loving every minute of it at the moment.”


Digital bank Bó is made up of a small, dedicated team

Nicholls’ enthusiasm for her new role could be attributed, in part, to the nature of this detached and almost independent subsidiary of the Royal Bank of Scotland. Despite its links to a traditional financial institution, Bó has some of the trappings of a modern challenger with its close-knit group of staff members.

But does the mobile-only institution feature any of the other contemporary facilities – beanbags, video games or ping pong tables – that are commonly associated with young, modern, autonomous fintechs?

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Digital bank Bó has created a small team with a start-up mentality

“The benefits of being small is that it’s had a really positive impact on the culture and pace of delivery that we’ve been able to achieve. We have 150 staff at the moment, and we work hard but also enjoy ourselves – we have a good time,” Nicholls says.

“People are committed to what we’re doing, and it’s encouraging to see the enthusiasm from people that want to join us. They’re excited by the prospect of being involved in designing and building this thing, as well as looking forward to launching and running it as a business.”

This appetite and zest will be required to tackle an ever-increasing social problem. Nicholls believes that it’s easy for people to live in a bubble while others are suffering under the crushing weight of financial strain.

“Looking into this need, as well as the qualitative research that we’ve done, we found that the need is definitely there, and we’re really passionate about helping people,” she reveals. “It’s also enabled us to create a business that’s a really appealing place to work; we’re really keen to recruit staff who believe in the social purpose of what we’re doing and are as passionate as we are about getting there.”


Bó enters a crowded UK digital bank ecosystem

As with many start-up companies, Bó is working with a large number of third-party suppliers, which helps it to build at speed and use technology from other innovative companies from around the world. The business initially used popular challenger bank Starling to make quicker transactions; however, Bó is now a direct participant into the faster payments scheme and went live on 8 March.

“We were lucky that we were given a slot by the scheme, and we were fortunate that we managed to make it within three months, which was the fastest application they’ve ever had,” she says. “So we no longer have reliance on Starling for that, because we are a direct member ourselves.”

Entering a crowded market with millennial-friendly rivals like N26, Monzo and Revolut, Bó will do many of the things that you’d expect a modern digital bank to do. Spend is broken down by category and retailer.

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Bó will compete with the likes of Revolut in a crowded UK fintech market (Credit: Revolut)

The product will also feature maps and real-time balance updates, as well as in-app card locking. The bank also firmly positions itself as a companion account, rather than replacing the user’s primary current account. The real differentiator, however, according to Nicholls, is the focus on behaviour change and money management.

“The service is aimed at people who withdraw £50 at the beginning of the week and that’s their budget for the week. When the cash is gone, it’s gone and there’s nothing else,” says Nicholls. “Our suggestion is put that £50 into your Bó account and let Bó manage that money; track your spending and get instant notifications, and then hopefully have a goal to save some of it at the end of the week or the end of the month.”


The Bó digital bank will remain separate from RBS

RBS has been investing heavily in technology since 2014, after posting its first annual profit following its £45.5 billion bailout over a decade ago. The big bank association ensures that Bó is a reasonably trusted entrance to the market and bypasses the potential fear of the unknown that accompanies jumping ship to an unfamiliar challenger.

“Bó will also be a separate brand. It will be a stand-alone business and, more importantly, standing on its own new greenfield technology platform, which is absolutely separate to that of RBS,” says Nicholls.

“This allows us to provide enhanced real-time features at speed and offer this new digital offering quickly but backed by a safe and secure institution. The other benefit of that is that we can draw on Natwest’s expertise and experience in terms of the control environment that we operate in.”

While high-street banks continue to close, wages stagnate, prices for consumer goods continue to rise and interest on student loans accumulates, Bó may become an outlet for a digitally literate banking audience growing disillusioned with the old ways of doing things and looking to embrace something new.

Latin wordsmith Publilius Syrus once wrote, ‘a small debt produces a debtor; a large one, an enemy’. As fresh, digital money management solutions continue to crop up, start-ups like Bó could provide a solution for those looking to tackle this common enemy, once and for all.


This article originally appeared in the summer 2019 edition of Future Banking. The full issue can be viewed here.