A low cost bank, but wait, a great customer experience too?

17 March 2017

Inside Atom

Stuart Bell
Stuart Bell

You have to wonder what the future of banking looks like. In the last 15 years we have come through the telephone and internet banking wars. In the last 5 years we have now adopted mobile devices as the primary channel for our banking and financial needs. Banks like Atom are now taking it further by having no physical branches, in fact our app is our branch and it’s in your pocket.

As you know banks have gone through a tough time in the last 10 years, a lot of them still are; reducing their branches, reducing their staff numbers and selling chunks of their business off; trying to put the ship back inside the proverbial bottle.

More worryingly, such behemoths present a systemic risk to the banking industry and our economy. Smaller, more nimble banks like us represent a growing next generation of banks, that will present a far lower risk to our economy. We’re not planning on being the biggest bank, but for many (and the right) reasons we aim to be as clever as we can in how we design ourselves.

Our big cousins are lumbered with decades of growth in operations and branch networks which creates an accumulated overhead born out of a pre-internet era view of the organisation. All of which has a downstream effect and has an influence on how well those banks understand their customers, what relationship they have with them and how good their products are.

Like any organisation that reaches a certain size the larger banks fragment into divisions even down to things such as channels with competing budgets and objectives. Atom is one contained organisation and our operating model of low cost and beautiful customer experience means that we will (by design) not allow ourselves to grow to a size which compromises this vision.

Our entry point as a digital business in the banking sector means we have an opportunity to avoid this, which is why it part of our business strategy to be app-based; it informs a lot of the decisions we make anywhere from recruitment to investment in powerful technologies that allow us to scale without as many overheads.

We have to invest in technology. In 2017, for a digital business that is app-based it would be counter to our culture and would only increase our cost base if we attempted to build a bank based on a 20th century philosophy. Banking is probably one of the last industries that has still to fully embrace technologies that have been available and utilised by other industries. This will change, but not overnight.

What it does mean is that we are able to start from a position of low overheads and the name of the game for us is to maintain that position. Larger and older institutions have the opposite issue, they are costly to run, require hundreds of staff to perform their business processes and are looking for ways to reduce their workarounds created by a lack of investment in technology.

By staying smart and lean we can pass this back to our customers with good products and excellent features, and we want to share those benefits with you too.

So, as a customer, what’s in it for you? One way to answer this is to ask yourselves where such great rates come from. Is it a gimmick to simply get noticed? Nope, they’re a direct outcome of a low cost strategy, using the right technology effectively to create a streamlined bank combined with none of the legacy systems the current banks are plagued with.

But don’t worry, it’s not bargain basement bank – low cost doesn’t mean poor customer experience or short cuts. Our customer experience is paramount and our differentiator; compromising on our customer experience would eat away at one of the pillars we operate around.

So, I encourage you to support this exciting phase of the banking journey (I know I know, but it is true).