A DIGITAL bank that aims to grab five per cent of the market and employ hundreds of North-East people will launch at the end of this year.

Confirmation today that Atom Bank has been handed a licence by the Bank of England means the Durham City-based lender will shortly start to offer retail, consumer and business products, including current accounts and credit cards.

Atom, which employs 100 permanent and contract staff and plans to recruit at least another 60 before the end of the year, wants to "set new standards for the banking sector" when it comes to technology and innovation. 

Its ambitious five year plan will see it create about 340 jobs, most of them based in the North-East, and build new offices at Durham's Rivergreen business park.

Atom is billing itself as the UK’s first digital-only bank, offering its services via apps for customers to use on their mobile phones, tablet devices and laptops. It does not plan to operate any high street branches. It will partner with a High Street bank to allow customers to pay cash to their accounts, although new technology allows transactions, such as cheque deposits, to be done online. 

The venture is the brainchild of Tyneside banking pioneer Anthony Thomson, who launched Metro Bank, in 2010.

Asked whether the launch of Atom or Metro had given him the bigger thrill, he told The Northern Echo: “It is a bit like asking you to choose which is your favourite child. But I would have to say Atom.

"When we launched Metro it was based on an American model whereas with this we have built it from scratch; shaped and developed it ourselves into something that is truly amazing. And it has been done right here in the North-East. Wherever possible we have recruited locally and used North-East contractors.

"This has been an incredible team effort and I am so proud of our people. We have a fantastic group of people here."

Mark Mullen, chief executive of the bank said: “This is a wonderful vote of confidence.

"Atom will offer a quality of digital experience without parallel in this sector or in many others. Our team reflects this. Between us we’ve built and run some of the most highly respected banks in the UK, brought ground-breaking innovation to manufacturing and service businesses, and created great software with a worldwide reach. Now all of this is being poured into building Atom so that customers will have a bank in their pocket that is ready whenever and wherever they need it.”

Regional investors include Sir Peter Vardy, NRG’s Lorna Moran, British Engines and North East Lep Board member Jeremy Middleton.

Atom has also secured financial support from Jim O’Neill, former chair of Goldman Sachs Asset Management; Neil Woodford’s CF Woodford Equity Income Fund, and former Brewin Dolphin Chief Operating Officer Simon Still.

Durham County Council has also has taken an equity share in Atom Bank, subscribing to more than 150,000 shares in lieu of rent for Northumbria House at Aykley Heads.

Those offices are only temporary, explained Mr Thompson, who plans to build new premises on the nearby Rivergreen business park in the next two to three years.

Mr Thomson added: “We have been working on securing our licence since July last year. It was clear a few weeks ago that there were no more major stumbling blocks, but until that letter from the Bank of England landed we could not be sure.

"It was an incredible feeling to know that we were finally a bank. We had a little celebration barbecue yesterday for staff and their families. It felt like we are already embedded in the local community.

"This is a great success story for the North-East, and another step towards the region playing a major part in the Northern Powerhouse.”

The team at Atom have been building the bank’s systems and branding alongside its year-long licence application. More testing will take place over the next few weeks before Atom launches its products.

"The goal is to take five per cent of the market within five years,"

Mr Thomson added: “We think that is very ambitious but all of the things we hear are that mobile banking is the way forward. This business is perfectly timed.”

His confidence is supported by new figures from the British Banking Association (BBA) which show that a revolution is taking place in the way we interact with our banks.

A total of 74 million transactions a year are done in the UK via telephone, 427 million at branches, 705 million by the internet and 895 million via mobile devices. In five years mobile has gone from being the least common way to bank to being the most popular. By the end of the decade the BBA estimates mobile will be used three times as much as branches and telephone banking combined.

Edward Twiddy, Atom’s Chief Operating and Innovation Officer said: “We’ve set about designing a banking app that’s in tune with how people think about their money. Our customer service team will provide support and technical expertise to customers all-day and everyday by phone, chat and email and through social media.

"Our customers will also have access to the UK and international ATM network and the ability to pay in cash and cheques when needed.”

James Ramsbotham, NECC chief executive welcomed the announcement, when he said: “This is fantastic news and a great milestone for the team at Atom Bank who have worked tremendously hard to get to this important stage.

“It’s also a huge fillip for the North-East to have such an innovative business based in the region. We greatly look forward to working with them as they grow here in the months and years ahead.”

“Ours is the right model at the right time,” concluded Mr Thomson.