James Daley

By James Daley

I have to temper my enthusiasm when I hear about new possible banking launches. As I wrote earlier this week, TSB's launch has been underwhelming. M&S Bank's current account is too niche to make it a serious challenger to the big five. Tesco Bank has been promising to launch a current account for years - but still has nothing to show for it. Virgin Money says an account is on the way - but it's not here yet. And Metro Bank, which has certainly put its money where its mouth is, has decided to reinvent banking from the London high street up - which means that it's still got no traction nationally.

So the news that Metro Bank founder Anthony Thomson, and former First Direct CEO Mark Mullen, are teaming up to launch yet another bank is something that needs to be taken with a pinch of salt for now.

It's still not clear where the money is coming from (and Metrobank are living proof of just how expensive it can be to launch a bank from scratch), and it's apparently over a year until we're going to see anything. Being a marketing man, Thomson has announced his plans and even come up with a name for the business - but for now, that really is all we've got to go on.

But...a challenger to First Direct is an exciting prospect

Whether or not Atom makes it to market next year, I certainly find it easy to see success for a bank that replicates the First Direct model. While I'm a big fan of Metro Bank - and indeed, Fairer Finance is even a client of theirs - I've always been rather skeptical about their decision to roll out branch by branch, while shunning online.

A few years ago, I met Metro's CEO Craig Donaldson, who told me that online account opening was just around the corner. Three years later, it still isn't something you can do. And Metro Bank's latest line is that it's committed to opening one branch at a time, so that it can ensure it maintains excellent levels of customer service. Can that really be the whole story?

If Metro Bank invested all the effort it puts into opening one branch into opening a national call centre, I'm sure it could offer an excellent banking proposition which people all over the country could enjoy. Either the technology is proving too tricky, or there's some other reason that I'm missing. But the longer Metro Bank takes to reach scale, the greater the chances of it failing.

Metrobank's founder says branches have gone out of fashion

Reading an interview with Anthony Thomson, I was struck by his assertion that things had changed since Metro Bank was launched, and that branches were becoming less important to people. This, he claimed, was the reason he was launching Atom.

It's certainly true that people are banking less in branch - but everyone (including Thomson, surely) knew that this was the way the world was going back in 2010. His comments make Metro Bank's business model all the more of a mystery to me.

Atom makes much more sense as a business model - and Thomson and Mullen make a powerful paring.

It's crazy that First Direct has remained pretty much unchallenged as the home of excellent customer service in banking. And Mullen and Thomson are right to see the opportunity to create a competitor. As long as they can raise the money - and they'll need a lot of it - I'd say they've got a better chance of shaking up the market than Tesco, M&S, Virgin Money and Metrobank have put together.