Digital Account Opening in the UK Part II - The Rise of the Neo Bank: End-to-End Digital Service as a Competitive Advantage

January 30, 2018 by John Devlin

The UK has seen several prominent launches in the past year or two.  The likes of Atom, Monzo, Revolut, and Starling have been attracting much attention for their mobile-first, branchless approach.  What stood out for me when signing up for their accounts is how seamless the process is.  They have foregone the Internet (that is just for providing information), instead, they are all about their apps.  Install the app, add your personal details and away you go. 

Sounds too simplistic?  Well, there is a little more to it but due to the new digital identity verification solutions available the effort in terms of time, effort and travel is largely reduced or removed completely.

Monzo and Starling, the best examples of truly digital bank account opening in the UK

The best examples, Monzo and Starling, had clear interfaces, simple steps and easy to follow instructions.  Being able to sign-up for an account in less than 10m minutes makes it very difficult for a user to walk away and abandon the process.  This includes their meeting know your customer (KYC) and anti-money laundering (AML) regulations that affect all banks offering current and pre-paid accounts, amongst other financial services.

Neo banks implement frictionless account sign-up leveraging digital identity verification

The neo banks have largely designed and implemented a frictionless sign-up process, utilising companies like Mitek*, who can automate the sign-up process via its Mobile Verify solution.  This enables the consumer to submit a government-issued ID document, such as a passport, via a smartphone camera.  This data is extracted and processed by machine learning algorithms that can confirm or refute whether it is authentic or not.  This process is supplemented by other digital advances, including biometrics, a liveness test video, plus the traditional PINs.

All in all, this leaves the applicant feeling confident, safe and in control.  From my own personal experiences during the assessment, it also helps to foster a very positive image of those that have got it right, compared to those who have not.  I am not sure whether to name them here but one bank, in particular, provided such a poor experience that I can state without doubt that had it not been a professional exercise I would have walked away long before the account activation process was complete.

*P.A.ID Strategies published its whitepaper on the assessment of UK banks in November 2017, which has been exclusively licensed by Mitek.  The whitepaper is available here.