Royal Bank of Scotland (RBS - Free Report) has been planning to launch a consumer digital platform in 2019, per a report by Sky News. The report further states that the digital platform will be named Bo, which means “to live” in Danish.
Management intends to shift around one million consumers from its subsidiary bank — NatWest — to the new online platform. This move is anticipated to benefit RBS by slashing the bank’s total operational costs. However, shares of RBS have declined 3.4% on the NYSE since the news came out on Sep 27.
Around 100 employees have been involved in the development of this platform, which will likely be operational as a mobile-only application. Per people knowledgeable of the matter, this application will use artificial intelligence and big data to provide a better interface to consumers, in turn, ensuring a seamless banking experience for them.
The bank’s latest move has been further substantiated by a RBS spokeswoman, who stated that "As part of the bank's wider investment in digital and innovation, RBS is working on a range of projects to better serve our customers in the era of digital and open banking. One of the projects we are looking at is building a separate, digital-only bank for personal customers."
Of late, there has been tremendous growth in the number of stand-alone digital banks in the United States. To counter this heightening competition, banks have also started building their own digital platforms. While Goldman Sachs (GS - Free Report) recently rolled out its online retail bank Marcus, U.S. Bancorp (USB - Free Report) acquired Electronic Transaction Systems Corporation to improve its electronic platform. Deutsche Bank (DB - Free Report) also obtained stake in Modopayments, this July, in a bid to expand its mobile offerings. These steps will ensure that banks are able to retain digital-savvy consumers and broaden their existing customer base as well.
Nonetheless, shares of the company have declined around 10.8% over the past six months, as against 1.5% growth recorded by its industry. The stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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