Article written by Joanne Cousins

86 400 Anthony Thomson talks digital banks

"In 2012 there was another seismic shift in the data I had spent 30 years reviewing. Going digital had truly arrived. People wanted to be completely mobile. This led to the launch of Atom Bank in the UK."

anthony thomson, chairman 86 400

Anthony Thompson is co-founder and chairman of 86 400, Australia's first smart bank.

His impressive resume includes founder and chairman of Atom Bank the UK's first mobile bank and, Metro bank in the UK, Anthony is one of the world's leading pioneers in digital banking.

Could you tell us a little bit more about 86 400?

86400 is Australia's first smart bank built with open banking in mind. The simple premise is the ability for the consumer to pull all of their bank accounts, credit cards, and payment services into one easy app. This allows customers to take full control of their money using data analysis.

What are your thoughts about the future of banking in the era of open banking?

There are a few interesting elements to this. Firstly the pace of development and rhythm at which banks will have to operate. We are lucky enough to have an incredibly strong team of people at 86 400. There is a mix of approximately half engineers and technical people and half traditional bankers. You need that mix of people to gain momentum in a digital bank, which by nature requires a fast rate of technology deployment.

Secondly, the use of an agile framework is essential, especially in a digital-only bank. Everything that underpins open banking should be about the consumer. How do you give the customer a better product/service/experience? The era of open banking should allow us to do that.

Our experience in the UK tells us the big banks think differently about open banking. Banks feel they have nothing to gain and everything to lose, which has resulted in them dragging their heels. The introduction of open banking to its fullest extent in the UK has been hampered by this. We are seeing a similar trend here in Australia. When open banking is fully integrated into Australia, I think it will be good for the consumer. The banks who choose to put the consumer first by using the technology available that underpins open banking should be in a great position.


86400 is a fully licensed bank with mortgage and lending products in your first year. How you have managed to achieve so much in your first 12 months?

We have just over 100 staff in Australia. When we show people around our CBD offices they are impressed that we have a fully functioning multi-product bank operating out of one floor. When COVID-19 hit, we were able to operate the entire bank seamlessly, without a single person working in the office using modern technology. Running a bank remotely three or four years ago would not have been possible.

Cuscal as our founding shareholder for 86400 has put us in an incredibly fortunate position. For those not aware, Cuscal is the largest independent provider of payment services here in Australia. Cuscal has provided us with the capital and resources, which enabled us to get off to a tremendous start. From this, we have been able to assemble a great team and focus on growing the bank without the monumental task of raising capital.

From my own experience of capital raising, which has been about a billion dollars over the last 11 years, it can be a real distraction to the management team. Having the ability to focus purely on the bank, gave us a great advantage in the Australian market.

Many traditional bankers question the neo bank model especially profitability. What are your thoughts?

I passionately believe that profit is a by-product of delivering what the customer wants. By providing a better service and experience for your customers, and managing your business well, you should be profitable.

Profit is very important to businesses. It is essential to pay the people who provide the risk capital. This in turn provides the resources, meaning growth. You can then pay the staff who work in your business. The end goal should always be doing something well for the customer.

The challenge of starting a new bank is that it is capital consumptive. Banks traditionally require lots of capital. Banks seem to more frequently go back to their shareholders with the 'we're doing well, we're growing fast, give us some more money', something which is different in other businesses. The capital intensive nature of banks has tended to make them a little more difficult than some of the non or lesser regulated FinTech.

Could you share with us your history and how you ended up running not just one, but multiple banks during your career?

My background is in marketing, not banking. Marketing is about looking at data, seeing an opportunity, and seizing that opportunity to develop a business. In 2007 when I first had the idea for Metro Bank I spent a long time carrying out research. The data all pointed to one thing, customers wanted value. The measure of this for High Street banks equated to one thing, Price. When you start digging into the consumers' response to "value" it meant more than just price. Customers valued service, convenience, trust, and transparency as well as price.

I saw a real opportunity to create a bank focused on all these elements. In 2012 there was another seismic shift in the data I had spent 30 years reviewing. Going digital had truly arrived. People wanted to be completely mobile. This led to the launch of Atom Bank in the UK.

My foray into the Australian market was championed by my wife a few years ago who liked the idea of a move to Australia. Luckily, she intended to come with me, not just pack me off!

I started researching the market and visited from the UK 16 times within 18 months. There was a great opportunity to create a digital bank here in Australia, with all of it's similarities to the UK. When I met with the Managing Director of Cuscal, he had a very clear vision of what they wanted to achieve. Cuscal had never built a bank and I had been around the block a couple of times before with Metro and Atom. The idea of us working together was a great marriage of our respective skills, experience, and expertise.

What can traditional banks do to regain the trust of customers?

My former partner in Metro bank was once asked a similar question at a conference. He is a well-known face and is recognisable for carrying his little Yorkshire Terrier with him everywhere. The question posed was:

"If we kidnap your dog, and don't give him back until you restore the trust in " BIG BANK" (they named a big American bank). What would you do?

He paused for a moment and said "I guess my dog is dead".

Restoring trust is an incredibly difficult challenge. I co-authored a book on the marketing of money last year, called No Small Change, which looked at the marketing of financial services in general, banks in particular. There was one conundrum we heavily researched which didn't make sense.

Consumer groups regularly say customers don't trust the big banks. On the flip side, big banks counter this argument with lots of their research saying customers do trust us. How can this be? One of them has to be wrong.

When we dug deeper (and we enlisted the help of a UCL professor) we found out they were both right. There are two types of trust. Cognitive and Associative. They are broken down as follow:

'Do I trust my big bank to have the salary that I paid into my account on Thursday still in my account on Monday?' YES
'Do I trust my big bank to pay my mortgage by direct debit on the 23rd of the month?'

These are both cognitive trust, which is based on their competence.

On the other side of the trust scale, we have;

'Do I trust my big bank, to put my interests first? The resounding answer to this question is 'No, I bloody don't'. This is associative trust.

Whilst we trust the competency of big banks we don't feel they have the best interests of the customer first. The real opportunity for new banks, like 86 400, is for us to demonstrate to our customers that we genuinely do put them first.

'Hard to believe that Newcastle upon Tyne is like the projects in LA but we did share a lot of similarities.'

Anthony Thomson 86 400

Why did you choose 86 400 as a name for the bank?

86 400 is actually the number of seconds in a day. We feel it's a great because we are all obsessed with helping Australians feel in control of their money, every second of every minute of every day.

When an idea for a business comes to mind I often apply an old marketing trick. Give your business human traits and qualities. I carried out this exercise when I had the idea for Atom Bank. What would the personality of our business look like? I sat at home in Somerset mulling over this question with a glass of wine.

I thought if Atom Bank were a person it would be someone who lives their life digitally. Someone who understands social media, and gets the psyche of our target market 'the millennial'. I suddenly had this image of I googled his name and suddenly I had a whole lot of info on him. Whilst his music is the thing he is most known for, he also has a huge AI business, employing hundreds of people across three continents. I was amazed to find out he is a tech entrepreneur.

To cut the story short, I contacted him, he liked the idea. He joined Atom as an advisor to the board and became a shareholder. It turns out we came from similar backgrounds. Hard to believe that Newcastle upon Tyne is like the projects in LA but we did share a lot of similarities. We remain friends, even though I am no longer involved in Atom Bank.

What are your thoughts on Australia as a FinTech hub?

I see several really exciting hubs around the world. Singapore, Shenzhen, California, New York, London, and incredibly the northeast of England. They all have great FinTech hubs. I believe it is more mindset, not geography that is the driving force. When you get young, hard-working, bright, people who are determined to make a success of ideas. Together they become greater than the sum of the parts, over time I believe the work being done on these hubs will be world-changing.

Finally, any plans to go back to the UK, or is Australia home for you?

Well, I think it is a question whether the Australian government would keep me! Certainly, my wife and I love living here, but there are lots of exciting places on the planet.

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