Do or Do not

How do you build a bank for the mobile world?

For three years, Mark Mullen has been helping to build the foundations of Atom Bank, the UK’s first bank made exclusively for mobile. Mark left his job at the HSBC Group in 2014 to co-found the bank, and is currently its CEO.

The Durham-based firm offers app-based banking with no branches and no opening hours.

Mark told us the story of Atom Bank at #TDC17, you can watch the full talk below.

Atom Bank has extracted over £100m in funds and has spent them all in the North East. It took them 1 year to do business plan, 1 year to licence, 1 year to start to trade. Atom Bank has been a licensed bank two years now and lend funds to small businesses and provides residential mortgages.

Mark Mullen begun his talk comparing being involved in a new business is like ‘being on a rollercoaster’. As he pointed out, when one is about to get onto a rollercoaster, whether they like it or not, there is a level of nervousness. When on, you cannot get off anymore. When it starts moving, initially it is not very scary but as it goes higher and higher you feel something bad is going to happen. Then you start going up and down throughout the ride and you still want to get off but you cannot. The interesting thing, Mark noted, is that other people say ‘what a nice ride you are having on that roller coaster’ but in reality, they have no clue because they are not there with you.

Being involved in a new business is like ‘being on a rollercoaster’

Atom Bank was founded in Newcastle, much of the original investment came from the NE and they are now employing 300 people in Durham. They started it because they wanted to create prosperity in the NE (even though it would have been easier to start the bank in London).

Mark discussed how important a role technology plays to Atom Bank and surprised by the fact that people willing to trust a bank that they can’t see. The company’s philosophy is that money is a valuable commodity and no one’s bank money are more important than others. They strive to make available this valuable commodity to our customers. Digital technology allows Atom Bank to create services that are 70–80% more efficient than a standard bank. Traditional banks are cumbersome, don’t need to change as they have a captive audience. Atom business model is that for some people digital will suit them and it means they can streamline and offer better value for money. Digital takes many of the costs out of banking as customers aren’t paying for obsolescence.

No matter how much technology is used and how much digitised a business is, it will always be dependent on good relationships with actual people, especially when there are problems. Hence, Mark advises that someone who wants to create a new business needs to understand who their customers are and build a business model around this. Businesses need to start with this attitude, not grow it along the way. For example, Atom Bank found that what mattered most to their customers is costs — almost like selling fuel, and this was the only way to compete with big traditional banks that already have their capital and resources well established.

Mark’s shared what he thinks are the 4 most important points to Atom Bank’s success:

• First, Atom Bank spent 2–3 years ‘barking at passing cars’ — meaning stop worrying about competitors. If you have a plan and really believe in it, you need to follow it and commit to it.
• Second: It’s better to have a ‘hole’ than an ‘arsehole’ — It is the team that drives the business and while it takes time to get the right people, getting the wrong people will damage the business.
• Third: Not rushing every decision. At Atom Bank, they were always worried about having enough money to do the next thing and felt we had to make every decision quickly yet we always had time to make the right decisions.
• Fourth: Have a robust plan, as if you want to take money to build your business, you need to make sure you have a robust plan. More importantly, you need to bring some of this money back.

When asked about the importance of business culture, his response was that “our philosophy is that you have to care for the people you work for — nurturing a culture of care is the most important ingredient, especially in banking.”