RBS is to close its standalone digital banking app Bó as part of a cost-saving drive.

The digital retail banking venture, which launched in November last year, was seen as RBS’ attempt to take on the growth of challenger banks Monzo, Revolut and Starling.

However, its launch had been hampered by setbacks, with chief executive Mark Baillie - RBS’ former chief operations officer - removed from his role as part of a wide-ranging senior management shake up by new chief executive Alison Rose.

In February the bank also had to write to 6,000 customers asking them to shred their debit cards in order to comply with the EU’s Strong Customer Authentication (SCA) rules.

Announcing its first quarter results today, the bank confirmed it would be winding down Bó in order to focus on Mettle, its more profitable digital banking platform for small and medium sized businesses (SMEs); also launched in November last year.

The technology that underpins Bó’s platform will be integrated into Mettle’s operations, RBS said, but it remains unclear whether staff assigned to Bó will be redeployed.

A spokesman for RBS said: “We are prioritising our investment spend across the bank on products and services that allow us to provide the best possible support for customers and colleagues - this is more critical than ever given the challenges we are all facing at this time.

“After careful consideration, we have made the decision to wind down Bó, and focus on our digital bank for SMEs, Mettle. As a bank, we will continue to test and learn, investing in innovative banking services that will provide a better experience for our new and existing customers, helping them to thrive.”

Commenting on the move, 11:FS lead researcher Sarah Kocianski said that Bó was always going to have a tough time attracting customers given the crowded nature and maturity of the digital banking market in the UK.

"Digital brands from incumbent banks have had mixed success — the reasons for Finn by Chase's failure were almost identical to Bó's, coming too late to a crowded market and failing to differentiate from peers and the parent brand's offering.

"Like incumbents, digital only banks are going to face challenges during the coming months of economic downturn and it remains to be seen if their financial positions and short term strategies for dealing with the fallout are robust enough to weather the storm," she continued. "It seems likely we will see some players in the digital banking space fail through the rest of 2020 - though I would think it unlikely those failures will be the fully licensed banks."

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