Well done to UK digital start-up Starling Bank for capturing some prize PR just prior to the Christmas break with news that it was investigating the possibility of delivering customers’ debit cards via drones.
If any other bank has explored the drones option, the news has passed me by.
I would however take issue with the Starling claim that drones delivery would enable it to deliver debit cards ‘in record time’.
So I suspect might Metro Bank and a few others who have opted for the rather simpler (and cheaper) option of issuing debit cards in-branch. Instant issuance of debit cards in-branch is not rocket science or new.
Nor does it require trial flights or the cooperation of the Civil Aviation Authority.
Just how well Starling, Tandem, Monzo et al fare as they ramp up their operations will be one of the most interesting aspects of UK retail banking in 2017.
The New Year kicked off with news that Tandem had secured an investment of up to £35m ($42m) from UK retailer House of Fraser. Interesting, but not earth-shattering and one might venture to suggest that rival UK start-up Atom will gain more sector expertise from BBVA who invested a similar sum in it over a year ago.
BBVA is among the more dynamic and innovative lenders; by contrast, House of Fraser has posted annual losses in each of the past five years.
Outside the UK, of the start-up breed Air Bank in the Czech Republic continues to catch the eye.
Launched as recently as November 2011, it has already captured 500,000 retail banking customers. It is on target to reach its target of one million customers by 2021. Unlike the UK neo-banks, it has a modest branch network and is aiming to hit 35 outlets in the next five years.
Air Bank is also planning to treble its current 120-strong ATM network to more than 300 by the end of 2017.
Its marketing brief is based on a simple belief: ‘Customers can like a bank’ in what appears a blatant steal from Metro Bank’s Love Your Bank creed.
Again, like Metro Bank, Air Bank has been hiring many of its staff from outwith the banking sector.
With a current market share by total assets of only around 2%, Air Bank will not cause too many sleepless nights just yet at the established players such as CSOB (17%) CS (16%) and KB (15%) but it is one to watch.
An interesting year ahead
The New Year kicked off with the welcome news that the UK government is no longer the largest shareholder in Lloyds Bank: its stake is now to below 6% and just behind the stake held by asset manager BlackRock.
It really will be a happy New Year when the UK government stake of over 70% in RBS reduces significantly.
Perhaps this is the year that the Prudential Regulation Authority will finally take action to kick off an independent review into the embarrassing and lengthy mess that is RBS’ failure to dispose of Williams & Glyn and its 300 branches.
This sage dates back to 2009 – not a misprint – 2009 – when a senior RBS executive told me he thought the sale could be achieved in about a year. Tempting as it would be to name and shame, I will resist.
It was 2012 that Santander walked away from a £1.6bn deal to acquire Williams & Glyn over IT concerns.
Alarm bells ought to have been ringing at that time given Santander’s stellar IT record following acquisitions of this type.
In the intervening four years, RBS has wasted over £1bn in trying and failing to create a standalone platform for W&G.
One of the issues has apparently been the handful of NatWest branded branches – only six in total – located in Scotland that operate on a different platform.
Quite why the six branches have not been closed and customers encouraged to switch their accounts to another bank in the past few years is a mystery.
Last time I checked, cities such as Glasgow, Edinburgh and Aberdeen where the branches are situated, have plenty of banking alternatives to NatWest.