UK Edition
Five reasons why RBS’s digital bank Bó was a failure
Bó was curtailed by the Royal Bank of Scotland before it ever really got going
When RBS unveiled its own digital bank Bó in November, it was immediately met with speculation about how successful it could be.
While in principle the idea of a bank throwing off the shackles of its legacy tech and diving head-first into the fintech was admirable, it has proven trickier than expected.
For one, RBS was some way behind more established players like Revolut and Monzo. But technical glitches and branding mishaps have plagued Bó since its launch.
In the end, RBS decided to end the project at a time when it was forced to increase its bad loans provisions by 10 times due to the coronavirus. Here's what went wrong:
The name
RBS’s foray into the world of fintech started with a failed audacious bid to scoop up Monzo. The Telegraph revealed in October that senior executives from the taxpayer-controlled lender approached the digital bank before baulking at the price tag.
The executives surmised that it would be cheaper to just set up their own alternative. Had the deal gone through, they would have at least avoided the naming gaffe that scoured the early days of Bó.
Bó, to someone familiar with the Irish language, directly translates to cow, even with the accent or “fada” as it’s called. The name was believed to be a reference to the words “to live” in Danish.
The app
User experience is crucial for the success of any fintech app. The ability to sign up rapidly and split bills instantly became synonymous with the new age of banking.
Unfortunately for Bó, mimicking the usability of Monzo and Revolut proved trickier than expected despite spending £100m.
In a review of the app after it launched, The Telegraph described it as “clunky and confused”.
The sign-up process of the app involved users taking a selfie with their tongue stuck out. Cringe-worthy requests for access to shiny bank accounts are nothing new. Monzo makes customers record a gut-wrenching selfie video where they state they want an account.
However, Bó ran into other difficulties such as troubles around accepting driving licenses and passports as proof of ID.
At launch, the Bó app boasted features of a 2015 fintech and was lacking in things like stock trading, cryptocurrency purchases, and the ability to get paid a day early.
A huge amount of ground to make up
The launch of Bó came four years after that of Monzo and Revolut and indeed five years after Starling Bank. The enormous head start gave the challenger banks crucial time to work out the kinks in their offerings, nail down the main current account product and then start to build on it with new features.
By October, Revolut had more than seven million customers, while Monzo had more than 3 million users, and Starling’s user base was nearing 1 million.
The attitude of some inside RBS at the time was that there were 42 million people in the UK without Monzo, so why give the fintechs a “free run”.
The bullish take on the market was ambitious but has proven to be naive. Challenger banks’ headstart has proven too much for Bo.
Reissuing cards
Asking customers to shred their cards is never a good look. But due to the European Union’s Strong Consumer Authentication regulation, Bó was forced to just that.
The company’s 6,000 customers that joined before January 3 were asked to destroy their banks cards and switch to new ones that were sent out. The new cards meant that customers were compliant with the regulation, which forces banks to regularly verify customers’ identities when using contactless payments.
While they are far from the only bank to be forced into such practices, it came at a rotten time for a product looking to gain momentum.
A public faux pas
Reputation can be everything for some businesses. Certainly in banking, striking ads and competitive interest rates can be crucial in winning over customers. But in fintech land, online reviews have a large part to play.
In December, The Telegraph reported on RBS being accused of writing fake reviews for its new app before it was officially available to download.
A series of five-star reviews of the app were published months ahead of its November launch, which praised features such as notifications and design.
Three reviews on Apple’s App Store accused RBS of planting fakes. At the time RBS said that more than 2,800 people had signed up to Bó as part of the pilot phase, which included staff across the bank.
“Feedback from these customers shows Bó has helped testers take control of their spending – which is why we built it,” the spokesman said
“We test our products, including with staff, before they are available to our customers and use feedback from pilots to improve services and products we offer.”