Behind the Headlines: Atomic disruption – looking for the ‘Uber’ of banking

Behind the Headlines: Atomic disruption – looking for the ‘Uber’ of banking

Benjamin Winter

In our ‘Behind the Headlines’ blog, we take a closer look at one of the week’s big news pieces, considering its significance and the response it has generated, as well as how it could further play out. This week, we look at the media reaction to multinational banking group BBVA’s £45m investment in the UK’s first mobile-only bank, Atom.

What’s happened?

After receiving a £45 million investment from Spain’s multinational banking group BBVA, Atom, the UK’s first mobile-only bank, will be launching early next year. Atom’s CEO, Mark Mullen, has set ambitious sights for the company in the past, saying that it can be as disruptive to the banking industry as Uber has been to taxis.

Why is it important?

The rapidly evolving nature of how we use the internet is leading to the biggest industrial shake up since the Victorian age. In an increasingly connected age, companies like Uber, Airbnb and Netflix, all labelled as ‘disruptors’, have brought their business closer to customers by using the internet to create innovative products that revolutionise user experience. Alex Brummer, City Editor of the Daily Mail, speaking last week at an event Pagefield attended, commented that financial journalists are looking forward to seeing the banking sector’s ‘Uber’ – its great ‘disruptor’. Mullen’s assertion in the media that Atom can be as disruptive as the controversial ride-sharing platform have therefore triggered plenty of excitement.

What’s the reaction been?

Despite the exciting rhetoric coming out of Atom, the majority of national media took a measured approach to the news. Hannah Prevett from The Times, taking a more conservative line, focussed on the bank’s digitisation of the lending process. For Martin Arnold and Emma Dunkley at the Financial Times, refusing to indulge themselves in comparing Atom to famous disruptive businesses, the big news was that BBVA had given the challenger bank a significant vote of confidence. CNBC’s Arjun Kharpal took the most animated line, leading with Atom’s potential to become the first big industry disruptor.

Elsewhere, in the business and tech trades, BBVA’s investment elicited a keen sense of excitement. Business Insider noted that Atom is now worth £150 million, before even launching, whilst Tech Crunch said that the challenger, with its focus on 18-34 year olds, is “promising to deliver a new kind of bank to a new generation of hipster savers and spenders.”

Best headline?

In a sector of the media not known for its sensationalist headlines, The Times’ ‘Atom set to drop a bomb in banking industry’ was as piquant as it got.

What’s next?

The reputation of the banking sector since the financial crash has created the perfect conditions for challenger banks to enter the market, with narratives based on trust, customer service and simplicity. But while many challengers in the financial services sector are not so keen on being associated with banking, Atom sees no issue in carrying the label. Speaking in The Times CEO Mark Mullen said, “[…] every time I hear somebody say, ‘We’re not a bank, we don’t like banks’, I think you’re either smoking dope, you don’t know what you’re talking about or you’re playing to the crowd, because you think it’s fashionable or easy…” It’s an atypical approach – a brave one certainly for a challenger bank – to enter a market and voluntarily place yourself in a media box labelled, “for kicking”. However it is a great example of businesses, or more specifically, the individuals behind the business staying true to their credentials (Atom’s other founder, Anthony Tomson, created Metro Bank, and Mullen was previously CEO of First Direct) and going head to head with established incumbents.

To be billed as the ‘Uber’ of banking gives Atom a reputation that it may of course not live up to – it’s early days after all. But fintech, especially in London, is a sector rife with innovation, and importantly, is attracting more investment. Brummer and other financial journalists may be close to getting their wish.

Picture credit: Atom Bank