Atom Bank, the new face of banking

November 7, 2015

Atom Bank is on a mission to revolutionise the UK banking system with its branch-free, paper-free, digital concept – and all delivered from its base in the North East. CEO Mark Mullen talks to Alison Cowie about the bank’s progress, its impact on the region and why he wants everyone to be carrying a bank in their pocket.
You cannot accuse Atom of lacking vison. The fledgling bank, headquartered in Aykley Heads, Durham, is yet to open its doors to customers, but already harbours ambitions to transform the 250-year-old UK banking industry.

How? By delivering a range of high-quality, customer-focused personal and business banking products and services, delivered principally though a pioneering mobile app.

It was Anthony Thomson, the co-founder of Metro Bank, who initiated the project two years ago. He approached Mark Mullen, who has 25 years’ experience in commercial and retail banking and was previously the CEO at the multi-award winning telephone and internet bank, first direct.

The pair began to talk about possible business models and concluded that a digital bank, optimised for mobile technologies, with a national reach and which championed customer experience and transparent pricing, was the way forward. Mark explains:

“The smartphone has transformed how people use information. It’s affecting every business, but banking more dramatically because now you can literally put your bank in your pocket and take it everywhere.

“Large, long-established banks are facing this with creaking technology, thousands of branches and inefficient central processing systems. These impose an immense cost that the customer is paying for. And all that is on the back of one of the worst crises in banking history, with widespread mistrust of banks among consumers. Creating a new bank, you don’t have these legacy issues and it can be built in the context of how customers behave today.”

With Anthony as Atom Bank’s chairman and Mark as its CEO, they collated a core team of professionals, all highly experienced in the financial industry, and began building their digital bank.

But it’s not easy to start a bank. Atom needed investment, and lots of it. More than £25 million was subsequently raised from a number of private individuals – many from the North East of England – which allowed Atom Bank to start the process of obtaining a UK banking licence from the Bank of England’s Prudential Regulation Authority.

To gain a licence from the Bank of England, Atom had to prove capital liquidity, sustainability and resilience. It had to demonstrate it had a viable business model, would not pose a risk for UK tax payers, had a legitimate reason to exist and would produce positive customer outcomes.
In June this year, six months after applying, Atom Bank was granted its licence – a major step forward for the business.

In the meantime, Atom Bank has been developing its innovative app, which will form the cornerstone of its service.

Designed and built at Atom HQ (using North Eastern expertise in software development – particularly from the gaming industry) the app aims to set new standards for the banking sector and bring pioneering technology to UK customers.

Biometric security and in-app account opening are just some of the features being developed to deliver a branch-free, paper-free and – hopefully – stress-free banking experience.

The Atom app (which is still firmly under wraps) is in advanced stages of testing and the team is hoping to have a live, albeit controlled, proposition for customers by the end of the year. Depending on the results of this, a full launch will follow in the first quarter of 2016. “We’re not in a hurry to launch, we’re in a hurry to get it right,” Mark assures.

The impact of choosing to base Atom Bank in the North, instead of the South East, is significant: the company estimates that 70 per cent of its outlay goes to businesses northwards of Birmingham, and 40 per cent is spent within 30 miles of Durham.

The city of Durham was chosen for Atom HQ for a number of reasons. Many of the team have ties to the region (Anthony Thomson was born in Newcastle) but there were hard economy drivers, too. “Durham is well connected with the East Coast Main Line, the North East has a very good pool of talent, and it’s cheaper that London,” says Mark. “When you add all these things together, Durham becomes a very attractive and logical place to be.”

In addition to a government sponsored knowledge transfer partnership with Durham University, Atom has a great relationship with Durham County Council, which owns Northumbira House – home to Atom HQ.

Atom’s location also means jobs for the North East. Staff numbers already exceed 100 and are expected to rise to 170 by the bank’s launch. If all goes to plan, the team could swell to 500 over the next three to four years.

As for Mark’s aspirations for Atom Bank, he reflects, “I want it to offer a truly extraordinary, high-quality customer service. For me, that’s more important that being big. There are a lot of big banks around, and there’s a lot of mediocrity and mistrust.

“I want Atom to be transparent and make it easier for customers to engage with our industry. We came here to change banking for good and I think we can truly do that.”