ALMOST seven years since the sight of customer’s besieging a North-East lender offered irrefutable proof that the banking industry was undergoing a sea change, Business Editor Andy Richardson talks to the people behind the region’s latest foray into the world of financial services.

NEWCASTLE-BORN banking pioneer Anthony Thomson had made no secret of his desire to locate his new venture in the North-East, but until recently he hadn’t found the ideal place.

Last Friday’s announcement that Durham had been chosen ahead of five rival sites across the region to become the national headquarters of digital bank Atom was a coup for the city. It was also a sign that Atom intends to do the unexpected.

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Sites on Tyneside were considered by Edward Twiddy, Atom’s chief operating office and director of innovation, and ultimately rejected in favour of Durham County Council-owned premises at Aykley Heads. Mr Thomson joked that the decision had nothing to do with Mr Twiddy being a resident of the university town, which meant he could walk to his new office in a matter of minutes.

In his defence, Mr Twiddy, who recently gave up a plum job at the North East Local Enterprise Partnership to join Atom, said that Durham offered a “compelling case.” All of Atom’s senior team live south of the Tyne, he explained, and Durham’s spot on the East Coast rail line, as well as its world class university, and reputation for being a pleasant place to live and work, added to its appeal. Atom will look as much to Leeds and even London to recruit specialist staff as it will towards Newcastle, where Sir Richard Branson’s Virgin Money has its UK base.

The leafy site close to Durham University Hospital that Atom has picked does not at first glance seem to be the typical home for a business with ambitions to be at the vanguard of a revolution. Its neighbours will include the North East Chamber of Commerce and ship insurers Sunderland Marine – the type of organisations more associated with adjectives like ‘dependable’ and ‘staunch’ rather than ‘groundbreaking’ or ‘cool’.

The Council bent over backwards to get Atom to come here. Council staff are gradually being moved out to offices in the city as Atom’s 20-strong team take over a building that will employ about 160 by the middle of next year. Northumbria House will become the headquarters of what has been billed as the UK’s only truly digital bank, and more bizarrely as the world’s first telepathic lender, that will predict a customer’s spending patterns and help manage their account accordingly.

It will attempt to find a niche in the market based in part on consumer mistrust in scandal-hit high street lenders.

The longer term plan in Durham is to construct purpose-built offices on a five acre site adjacent to the Rivergreen business centre a few hundred yards from Atom’s temporary home. Up to 400 people will work here by the end of the decade, if plans are approved, and if the bank builds up a sufficiently strong customer base.

When I met Mr Thomson at the Rivergreen Centre on Friday he remained tight-lipped about how many customers he expects to attract, and he was deliberately vague about the exact opening date for the bank, “we don’t want to be hostages to fortune” he said when pressed, but it is likely to start trading sometime next summer. Atom’s banking licence is still to be approved, which means its launch date is currently dependent upon regulatory approval.

A report last week by Accenture suggested many of us still value bricks and mortar branches. Figures showed the opposite of what might have been expected: customers are using bank branches more often, with 52 per cent of customers now using a branch monthly compared to just 43 per cent three years ago. Atom will operate no branches, all transactions will be done by a customer using their smartphone or tablet computer.

Mr Thomson said: “There might be a role for branches in the market, but those people who don’t use branches, and do their transactions online still have to pay for them. We offer them an alternative.”

Mr Twiddy talked enthusiastically about his vision for the business as a place where Atom’s banking staff will work under one roof alongside partners to develop new hi tech banking products.

His role as director of innovation offers another clue for the type of business they are building. This will be a bank that will have more in common with innovators like Google or Microsoft – operating at the cutting edge of innovation in funky open-plan surroundings – than traditional lenders housed in Victorian edifices.

“We will pay good money to get the best people we can,” said Mr Twiddy, who believed that Atom’s lack of history – often a key selling point for banks – would be one of its main strengths. He explained: “We won’t be bogged down by legacy IT systems. We haven’t been embroiled in mis-selling scandals, we won’t operate a network of branches. Our lower cost base will give us the freedom to deliver great products to our customers, with great service at a great price.”

His bold words are given weight by the track record of the two people at the top of the organisation. Mr Thomson founded Metro, the first new high street bank set up in Britain for more than 150 years when it launched in 2010. Alongside him at Atom is Mark Mullen, who was chief executive of First Direct, which broke the mould by offering banking services that customers managed themselves over the phone and online.

Mr Thomson added: “We want to be revolutionary. Much of that difference is in the customer experience and that is delivered by people. We need to create a great atmosphere here. It also has to be safe and secure because this will operate 24/7.

“The area has a very well educated and skilled workforce. Unfortunately because of the problems of Northern Rock a lot of great people with the skills we need are available.

“We have already had a lot of people coming to us asking – are you looking for someone with my kind of skills. That is a good sign."

Stewart Bromley, Atom’s director of people and customer experience, expects to start a graduate programme next year and a year later an apprenticeship scheme will be introduced.

He talked about the bank’s values using buzzwords such as respectful, pioneering, sharing, courageous, which he said will help to create the bank’s identity.

“Our mission is to change banking for good,” said Mr Bromley, in language that anyone can understand.