Royal Bank of Scotland is scrapping Bó, its digital bank, to focus on lending to customers struggling to cope with the impact of the Covid-19 pandemic and consequent lockdown of the economy.
Bó’s prospects had appeared to be gloomy in January when RBS announced the departure of Mark Bailie, who had set up the digital lender. Mr Bailie had been a contender for the chief executive role at RBS before losing out to Alison Rose in November.
RBS spent tens of millions of pounds creating the new lender, which it believed was a more cost-effective approach than buying an independent financial technology company. It issued a bright yellow card that it believed would attract younger customers.
The business was launched in November and used social influencers in its advertising campaign. It ran into immediate problems after critics said that its functionality was inferior to that of established rivals such as Monzo and Revolut.
Bó’s technology will be wrapped into Mettle, a digital bank for small business customers that had been developed by Ms Rose when she led the commercial banking department.
Ms Rose said that Bó, which has 11,000 customers, had not failed. “We have made a prudent decision to merge the technology platforms of Bó and Mettle,” she said. “As I have always said, we will apply a disciplined view in terms of our approach to innovations — testing and learning.” She added that the bank’s priorities were elsewhere. “Clearly in the current situation we’ve had to make prioritisation choices about where we will invest.”
Bó was created to help people who were not on top of their finances, irrespective of their salary, by offering ways to set budgets and save money. According to its research 40 per cent of working-age adults in Britain — about 17 million people — have less than £100 in savings. It used techniques developed by the government-backed Behavioural Insights Team to nudge customers into better habits.
