Bo Money, Less Problems: RBS sets up its own digital bank named Bó
December 21, 2019
1 min read
What's going on here?
After two years of developing and £100 million spent, the Royal Bank of Scotland (RBS) has launched its own digital, cloud-based bank named Bó in order to compete against the rise of digital banks.
What does this mean?
Bó offers customers an app-based “current account”, a debit card, instant spending notifications, and fee-free spending abroad at Visa exchange rates. The developers behind the bank explained that Bó is an account aiming to help the “three-quarters of people in the UK” living “financially unsustainable lives” with features such as: a spending budget, set savings goals, and the ability to track everyday spending.
However, despite being called a “current account” by RBS, Bó does not offer interest or support Direct Debits as it has not joined the Bacs system. RBS have not confirmed when or if Bó will join the Bacs system but have instead emphasised that most customers value app-based accounts for their budgeting tools and ease of use abroad.
What's the big picture effect?
According to research done by Accenture, the number of customers for the UK’s digital-only banks are expected to triple to 35 million within the next year. With innovative features and great flexibility offered, their popularity amongst consumers was evident with a Net Promoter Score of 62 whereas traditional banks lagged behind with a score of 19.
However, digital-only banks (such as Monzo and Starling) have largely struggled to get customers to use their accounts as their primary account as opposed to an account just for budgeting. With this in mind, Bó hopes to push forward with its appealing association with a well-established bank and attract customers who have been cautious about using a digital-only bank.
Report written by Heerim Hwang
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