A bank is born: Atom

The other day Atom Bank was granted a banking license. It could be the start of a banking revolution. We have had lots of new ways of carrying out transactions from now established PayPal to newer Apple Pay or Travelex Supercard. But there haven't been many new, if any, ways to bank.

The Telegraph notes how things have been helped, finally, by the Bank of England: "The current licencing system was established to make it easier to set up a new bank. Previously, a catch-22 situation meant that would-be banks could not get authorised until they raised enough capital and hired suitable executives, but investors and staff were reluctant to join before the licence was granted.

The new two-step system is designed to overcome this hurdle, and appears to have succeeded – the Bank of England said it authorised five new banks in the 2014-15 financial year, and is in talks with 25 other prospective banks." More of the article here.

PocketLint summarises the story well:

Atom Bank will be the UK’s first bank without its own branch, just an app.

The UK is about to get its first bank which doesn't have its own branch, but runs entirely from an app. Atom Bank is that app.

At the moment the cutting edge banking service has simply been granted the right to operate in the UK. The app should launch later this year.

The plan is to offer the best technology can manage and to set a new standard for tech in banking. The app will use biometric security, 3D visualisations and even gaming technology.

The only real world interaction customers can have with Atom Bank will be through a third-party. The app bank is going to partner with a high street bank so that branches will be available for paying in cash and cheques. Who that is remains to be seen.

Atom Bank will have a website but it won't work for banking, rather as an entry point to the experience. Customers will be able to download an app onto their desktop for banking from a computer.

The company rasied £25 million last year and will be run by CEO Mark Mullen who previously ran HSBC's telephone banking branch First Direct.

Little else has been revealed about how the app works or what it offers. Mullen says he doesn't want to give away what is planned for the competition to copy.

Expect to hear more soon as the Atom Bank app comes to market.

- To my mind a very interesting idea that I think will do well. It has very experienced leadership. I like the fact it's based in Durham far outside the London bubble. However it's not a complete break from the old as it intends to still rely on one of the old physical banking networks for when you need to go and pay in a cheque and alike. Finally it still needs to raise a bit more more to meet capital requirements.

Best of luck to them.