LONDON (Reuters) - Britain’s Royal Bank of Scotland (RBS.L) is working on plans to create a standalone digital bank, Sky News reported on Monday, as small, app-only banks with low fees target traditional lenders’ market share.
A spokeswoman for RBS declined to confirm the Sky News report but said the bank did need to launch new approaches to keep pace with rapid change in the industry.
“We’re focused on using automation and technology to deliver a more efficient banking experience that better reflects the changing way our customers now bank,” the spokeswoman said.
New regulation intended to boost competition in British banking, the growing popularity of financial technology and declining footfall in branches has seen high-street lenders turn their attention to innovation and digitization.
Lloyds Banking Group (LLOY.L) and RBS both unveiled technology investments in February, following branch closures and job cuts earlier as they try to adapt to change and cut costs.
Sky News said top executives at RBS had been assigned to the project, which was in the early stages and may not result in a new bank coming to market.
If it did, it would join recent upstarts like Monzo and Revolut, which have enjoyed rapid growth in recent years as their tech-driven propositions resonate with the young and tech savvy.
Monzo’s user base surged by 300 percent to 450,000 in nine months last year, while Revolut had 1.5 million users across Europe in February.
Speaking at its results, when RBS reported its first annual profit in a decade, Chief Executive Ross McEwan said that the bank was shifting its focus to become “digital first”.
Reporting by Emma Rumney; Editing by Alexander Smith