The short story of RBS’ failed digital bank Bó

Just six months after launching, RBS has pulled the plug on its digital retail bank. Was the writing on the wall?

By Isabel Woodford

Bó, the digital bank developed by the high street lender RBS/NatWest to challenge the likes of Monzo and Starling, will be wound down — just six months after its public launch.

The announcement came after RBS reported its full-year results on Friday.

RBS chief executive Alison Rose hinted that the coronavirus pandemic had influenced the decision to close Bó, as the bank announced sunken profits and braced itself for heavy credit losses in a tough economy.

Bó itself also likely experienced a downturn in customer engagement during the crisis, with its fellow digital banks — including Monzo and Starling — seeing signups dive in March, according to Sifted analysis.

“The circumstances have changed,” RBS’s Rose told Yahoo Finance UK.

RBS’s landmark retreat from the digital frontline will be a sting. More broadly, it’s another sign that big banks are struggling to emulate its digital-only peers, who have been vocal about their intentions to take market share.

A fleeting history

RBS began building Bó in September 2018 to take on the likes of Monzo, after short-lived conversations about buying the London startup.

Instead, RBS opted to allocate over £100m to launch Bó itself, introducing many of the same features that shot Monzo to fame. But the key differentiator was Bó’s focus on “money-saving” tips and the security of being linked to a traditional bank.

Bó hired tech consultancy Oliver Wyman to help build it and also brought on team members from digital banking app Loot in June 2019, after the startup went into administration. Loot’s chief executive Ollie Purdue joined Bó as chief product officer, who Sifted reported was leaving the bank last week.

Bó ‘s 150-strong staff were alerted last night and its 11,000 customers were informed this morning.

Margin of error

Besides coronavirus and the need to cut costs, there are wider issues that may have played into Bó’s decline — and why it’s been cut instead of Mettle, RBS’s digital bank focused on business customers.

  • Politics
    It’s no secret there have been rumblings at the top of Bó and indeed RBS. Bó’s chief executive and mastermind Mark Bailie stepped down in January. One insider close to Bó told Sifted there had been a long-standing clash between Bailie and RBS’ Rose about Bó’s future and survival. With Bailie no longer at the bank to defend Bó (and the ambition to see it attract “million[s]” of customers), Bó essentially lost its biggest advocate.
  • Tech flaws
    Bó’s tech stack is said to have been plagued with problems, with the team spending the first three months post-launch bug fixing and prompting worries from RBS investors. In addition, a compliance glitch forced thousands of users to replace their cards earlier this year. The early tech failings were also aggravated by a rush to go live to avoid the project being cancelled, one insider told Sifted.
  • Poor user feedback
    Bó was hit by a string of critical reviews on the App Store when it launched in December last year. But things haven’t gotten better — it’s still rated 3.2 out 5 on iOS. Meanwhile, Mettle enjoys a 4.7. 
  • Limited engagement.
    Insiders have told Sifted that although Bó had far more customers as a retail bank, Mettle had more engagement (transactions, deposit, spending, app usage). Engagement remains a crucial data point for most digital banks, and business clients also generate more revenue per capita given they generally hold larger deposits and credit applications.

RBS announced Bó and Mettle would be integrated, and a senior figure at the bank confirmed Bó’s IT stack would not be up for sale.

Fintech, the corporate way

Like Mettle, Bó was a so-called “flanker brand” — sitting outside RBS’s core infrastructure. Yet it was still bound by its inherently cautious parent and key obstacles that come with that, said Mettle’s chief executive Marieke Flament.

“The biggest challenge is probably that they’re two different cultures, Mettle and RBS… Our way of working is more like a tech company than a bank,” she told Sifted earlier this year.

Anne Boden, a former RBS employee and now chief executive at Starling, also argued big banks can suffocate true fintech innovation.

“I came from that world… if I thought I was going to be able to create that I would have done,” Boden told Sifted last year. “It’s very difficult to replicate the energy and technology of a startup.”

Indeed, corporate innovation projects have a dismal survival rate.

The nature of banking innovation also means executives fail to fully invest mentally in side projects, according to a former Lloyds exec.

“That’s why they give these things a separate brand. If they want to close it without lasting embarrassment, they can,” they explained.

While RBS may be spared its blushes, Bó’s decline comes as a serious blow to its digital planning.

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Good to see Oliver Wyman getting credited for their contribution here, but what about Accenture and Fjord? They went really big with the marketing fanfare for this on launch – surely now they have to carry the can for tech-stack issues troubles and the poor user growth & app reviews?

You’ll burn through £100m quite quickly if you’re handing it over for who take 2 years+ of effort to deliver an under-featured basic top up card proposition…

Clive Reffell
Clive Reffell

Do you remember when Rupert Murdoch’s News Corporation bought MySpace? The old-school media operation had little idea what to do with and how to develop its online social media purchase. It withered away, eclipsed by Facebook that started a year behind it. In a similar vein, it looks rather like RBS launched a me-too operation run more by employees (who had absorbed a banking industry mindset) and less by entrepreneurs, with different attitudes to risk and urgency. Did they think they were building a disruptive, startup fintech business, or reinforcing an existing traditional one with a “brand extension”?

Check ur facts
Check ur facts

RBS didn’t announce any losses…..

Andrew Turvey
Andrew Turvey

Indeed they made a profit (just) even with a ton of COVID19 provisions. Technically their commercial division made a loss as did their Ireland subsidiary, but I don’t think that’s what they meant. I don’t know if the article has been corrected but it no longer refers to losses.


I’d love to see the SWOT analysis from which a state-owned 300-year-old regal bank settled on ‘coolness’ as a competitive strategy!