Not making up the numbers: An interview w. Anthony Thomson, 86 400

It’s fair to say that Anthony Thomson knows a thing, or three, about setting up challenger banks. He recently talked to Simon Taylor about customer centricity, Techfin and Australian banking.

A market dominated by large incumbents, innovation occurring at a pace that would be disrespectful to glacial movement. Anthony Thomson’s been there, seen it and done it.

First of all with Metro Bank, the UK’s first new bank in more than 150 years, focused on building a branch network, then in the complete opposite direction with Atom, the UK’s first mobile-first bank.

And now he’s setting his sights on Australia with his latest venture 86 400. Don’t worry, we’ll get to the name.

A great win for the customer can be a great win for the bank

A marketer at heart, Thomson has a unique take on what it takes to find underserved areas. He’s all about the data. Trawl it, discover the insights and build towards the opportunities.

Easy to say, harder to do.

But as he points out, both Metro and Atom shared this as a central tenet, even if, due to shifting market conditions and technology considerations, the end results were markedly different.

I’m a great believer in profit as a by-product of doing something well for the customer but, ultimately, you do have to make profit.

Banking is expensive. It’s capital consumptive.

Thomson openly queries certain investors approach of 'build it and they will come' because it necessitates building a large customer and being prepared to make a profit from them at some point in the future.

“You still hear talk of we’ll break even in year three, IPO in four…my bitter experience is that everything takes longer than you think, and costs much more than you think.”

However, as more funding is funnelled toward the sector, the sources of investment are starting to shift, and, so too the expectations. He argues this has led to the rise of firms that are more ‘Techfin’, focussing technology to solve financial services issues than ‘Fintech’. That, in turn, opens up the sector to a vast swathe of experienced, tech-savvy investors examining how disruption in the sector offers attractive funding opportunities.

Thomson could make a grandiose statement about the opportunities Australia affords and the lessons he’s learnt to date. There are incumbent big banks, challengers such as Xinja and Volt, and a regulatory framework that largely follows a UK foundation.

While these are all true, they’re not the reason he moved halfway around the world. It was a lifestyle change for him and his wife.

But, almost inevitably, banking lured him back and led to him founding a new challenger in the market 86 400. At first it may seem an odd brand choice, but there is a serious intent and a central conceit around being customer centric and supporting financial wellbeing.

He is, understandably, bullish about the new bank, outlining how it will use big data and machine learning techniques to analyse how to help its customers, every second of every day.

Listen to the full episode here, to hear life lessons from his other passion, track driving, more details on 86 400, and why bank migrations are a data, not a technology, issue.

You can also hear Anthony dissecting challenger banks and market evolution in Episode 242.