Atom Bank’s vibrant culture and use of tech are intended to make it stand out and to improve the customer’s experience of the housebuying process
Maria Harris, Atom Bank director of retail mortgages, thought she had said goodbye to the banking sector for good, in favour of the cosy world of mutuals. So it was going to take something very compelling to change her mind.
That offer came in 2014 from former First Direct chief executive Mark Mullen, who invited Harris to join Atom Bank – the digital challenger he was launching with Metro Bank co-founder Anthony Thomson – and design its mortgage journey from scratch. Harris saw the chance to make her mark.
“It was the coolest thing ever,” she says. “I had a completely blank sheet of paper.
“There were no legacy systems to deal with. I got to design the perfect mortgage journey and then recruit my team around it.”
At Atom Bank’s Durham headquarters, it is clear how hard the brand tries to differentiate its culture from that of a typical bank. There is a youthful and vibrant feel to the offices, which have taken their cue from the world of start-ups rather than the Square Mile.
Neon motivational signs light up the walls; there is a fruit bowl at the end of every row of desks; there are comfy breakout booths; and the general atmosphere is lively. There is even a ping-pong room and an honesty tuck shop. Every day is dress-down Friday: Ramones T-shirts and colourful hair dye abound.
The bank will neither confirm nor deny reports that it has signed a £4m share deal with Will.i.am, rapper and star of ITV’s The Voice, apparently recruiting him to act as a consultant and increase its social media reach. However, the rumours have not harmed its brand – or its street credibility.
Atom’s website pursues a similar theme. Its ‘Our family’ page has profiles of all 250 employees, whose formal headshots morph into silly faces when a computer mouse hovers over them. The page conspicuously swerves any suggestion of hierarchy, with board members relegated to the bottom of the list and the chief executive buried in the midst of more junior staff.
Off the scale
The mortgage journey that Harris was so excited to design launched in December 2016. However, the full scale of Harris’s ambition was restricted by the industry’s parameters. As Atom had taken the decision to be an intermediary-only lender, it was obliged to work alongside sourcing systems and other software already used by brokers.
“I did a lot of research and we used technology to fix the bits of the process that were painful for the intermediary,” says Harris.
But she admits: “The world is not ready to do a mortgage application in an app. In the intermediary world it would be really challenging for them to meet with compliance as you have to go and source, you have to be able to show your comparisons, and they just weren’t ready for that.”
Atom’s mortgage app is aimed at the customer rather than the broker, designed to help them understand the different stages in the application process and manage their account thereafter.
When the customer has a mortgage decision in principle, this appears as a document in the app, which they can airdrop or email to estate agents and house vendors to show they have finance in place. When it comes to accepting the mortgage offer, as well as entering a PIN number there are various biometric security measures. These include taking a selfie and repeating a phrase to pass face and voice recognition checks. Fingerprint checks will be added soon.
The decision to lend only through intermediaries was taken very early, explains Harris.
“Having an intermediary for mortgages is important because you know that the customer has chosen the product that is absolutely right for them. That’s quite a fundamental thing for us.”
But deciding which brokers to partner at the start was much trickier. The bank still lacks the lending capacity to open up its products to the whole market, so it is slowly adding network partners that give it the best reach, both geographically and in terms of customer mix.
To date its panel comprises Legal & General key accounts (Mortgage Advice Bureau, Nouveau and Stonebridge) and LSL Group (First Complete and Pink).
“It’s been quite a challenge for me because I have worked in the industry for such a long time and I’ve got really good relationships with all the networks and mortgage clubs,” says Harris.
“They all want to be part of it and we really want to put them all on panel, but we haven’t enough capital to support lending through all of them yet.
“We have to do it a bit at a time. At the moment we are completely balance sheet funded, so we take in our own retail deposits and we lend them out.”
Harris also made the decision to start with networks rather than directly authorised advisers. She says: “As a new lender, having a network partner gives us quite a lot of support in terms of compliance risk and oversight, and in the directly authorised market that structure is slightly different. You can’t really open up to one mortgage club and not another, or some DAs and not others. It’s quite difficult to control the volume.
“You also need a good number of people out in the field to do all the risk and compliance. We are not set up for that level of overhead yet.”
Atom has seven field-based business development managers and seven intermediary support staff, the latter being telephone based. Phone, email and webchat support is available 24/7 and 365 days a year.
Customers increasingly expect a round-the-clock, seamless service that they can access across multiple channels. While some still require face-to-face contact, others want to use smartphones, tablets and instant-messaging services and they demand a quick response to queries.
The housing industry could learn a lot from the collaborative style of tech start-ups, argues Harris. She believes the Second Payment Services Directive in 2018 will be a huge opportunity to introduce open banking and improve the customer’s experience of the housebuying process. The EU directive will open up data held by the banking industry to third-party companies, with the aim of giving customers more choice and a wider range of services to manage their money.
In the tech world, the industry sometimes comes together in a ‘hack-athon’ to fix problems. The same needs to be done to address the antiquated housebuying process, says Harris.
“In my perfect world we would get the whole industry to sit down collectively and plot out what the customer journey should be and build the technology around open platforms, block chain, whatever has to happen to make the customer journey of buying, selling, moving, remortgaging, whatever, so much easier.”
Harris continues: “As an industry, we are not great at doing stuff together.
“I don’t know if anyone has ever looked at our end-to-end journey and said: ‘This is crackers. Why do we do it this way? Where did all these hurdles come from?’ And the person who feels that pain the most is the customer.
“Once the PSD2 comes in, people will get the whole concept of open banking and APIs; what that actually means in technology terms. I don’t think the industry is there yet. That principle of data sharing in a secure way, in a block chain way, where everything is validated, could change the whole process.”
Harris is as passionate about improving the diversity of the mortgage industry as she is about upgrading its technology. She is Atom’s representative for the Women in Finance Charter and says being pushy has got her a long way in a male-dominated sector.
“Having been in the industry for more than a decade, it disappoints me that the number of women in senior positions hasn’t changed much. When I turn up at panels and roundtables, often I’m the only female.
“I’m quite cheeky and maybe it’s a northern thing: I’m not shy. I try and get myself invited to panels and forums and rock up even if I am the only woman. And then I invite people with me. The more we can do that and have a presence, the more people will get used to our being there and behaviour will change.”
Lack of ethnic and other diversity is also a problem.
“In our industry, lots of segments are under-represented, not just women,” she says.
“Part of that is historical in that, for a long time, there were so many men in the industry. They have moved up the career ladder and tended to hire from within. We don’t get many outside people who come in at senior levels.”
She adds: “And people tend to take their friends with them so, if you start off with a very male-dominated pool, you end up with quite a male-dominated senior management team.”
But Atom has the opportunity to do things differently, she says.
“The board is actually 50:50 male-female. I don’t know if that was by design or just the way it happened, but we have some women with really cool backgrounds.
“Our staff ratio is not far off 50:50, although there are areas that are more male dominated, such as the development team.”
Atom has set itself lofty targets in terms of the cultural and technological changes it hopes to bring about in the mortgage sector.
No doubt brokers will be quick to measure the bank against those targets as soon as its mortgages reach the wider intermediary market.