RBS abandons Monzo-challenger Bó

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
An RBS Bo card. Photo: RBS

Royal Bank of Scotland (RBS.L) has ended an attempt to compete with digital challenger banks like Monzo and Revolut, shutting down its app-only bank Bó.

RBS said in its full-year results on Friday it would “wind down Bó as a customer-facing brand” just six months after the challenger brand was launched to the public.

RBS will instead focus on Mettle, the second of its two digital-only challenger brands. Bó will be merged with Mettle, which is focused on the small business market.

“The circumstances have changed,” chief executive Alison Rose told Yahoo Finance UK on Friday.

“We’ve always said that we will look to innovate. Clearly in the current situation we’ve had to make prioritisation choices around where we should invest and what we should do to support our existing customers.”

Rose’s comments suggest the COVID-19 pandemic influenced the decision to close Bó. She said there was greater “opportunity” in the small business market given the level of “support” businesses currently require.

Bó has around 11,000 customers, mostly “friends and family”, Rose said, who RBS will “continue to support”.

“Bó was something we were testing and learning from,” she said. “It was launched in the app store but we never undertook a consumer launch or introduced any type of acquisition targets.”

The shuttering of Bó marks a high-profile retreat in the battle between big banks and the wave of digital-only challengers that have emerged in recent years.

RBS first begun working on Bó in September 2018 in response to the surging popularity of startup banks such as Monzo, Revolut, and Starling.

Bó’s chief executive Mark Bailie told the Financial Times in April 2019 RBS was taking the project “very seriously” and hoped to have “a few million” customers within five years.

Bó launched in November 2019 but has struggled since the start. Bailie left the business in January 2020, just months after launch, and it was forced to reissue around 6,000 cards in February after failing to address new EU rules. Bó’s chief product officer left last week.

Rose denied that Bó had “failed” on a call with journalists on Friday. She said RBS took a “disciplined” approach to innovation and had taken the “prudent” decision to merge Bó and Mettle given the circumstances.

She added that the “learnings” from Bó would be valuable to Mettle.

“The team in Bó has done an excellent job,” she said.

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