New App Only Banks

stelam1975

Hello,
New to the forum (not the site).
Just wanted peoples opinions on how safe would you feel keeping your savings in these new app only banks (Atom, Tandem etc.)
My wife and I will be in a fortunate position next year where we will have a significant amount of money and initially would want to put this in a fixed rate savings account.
I appreciate the £85K (£170K joint) protection but do people really open multiple accounts with different banks. I think if it was HSBC, Santander etc I would feel confident but have no idea about these newbies.

badger09

I've had savings accounts with Atom in the past when their rates were very attractive, and still maintain a current account with Starling, for overseas spending (remember that?)

No real problem with either as a reasonably tech savvy 70+ year old. OH, however, wouldn't have a clue how to operate them.

Had to contact Starling CS at one point. Slightly frustrating, but they sorted the issue eventually. 

I wouldn't deliberately ignore the FSCS limit with any bank.  

Albermarle

I would not panic about going over the £85K limit by a few grand with HSBC, Nationwide etc but would keep to that limit with these newer operators.
If you were not new to the forum , you would know the next question - Why are you planning to hold so much cash earning 1% when inflation is eating your money ?

gm0

Your safety in terms of FSCS protection to 85k per insitution is the main issue.  And if you can stand waiting for your money at some point if something unexpected happens with a startup's tech then fine.  Legacy banks regularly demonstrate that fallibility is everywhere - RBS, TSB etc. etc. not unique to startups.

Nonetheless - I am personally very negative about "app only" as a concept. 

If an app is the only channel supported then it is hostage to screwups, broken updates, obsolete phones, outages etc. 

A serious bank should have more than one channel to transact on and more than one to deal with problems on.  Support inside the app being a particular bugbear.  And I don't see why the bank should get to randomly tell me when to get a new phone or completely lose access to my money.  The fact that many people roll phones regularly on contracts does not make this true 100% but if they choose that model and don't want to attract my money then - that's fine. 

But from a business continuity standpoint - you'll struggle to convince me

Daliah

gm0 said:

Your safety in terms of FSCS protection to 85k per insitution is the main issue.  And if you can stand waiting for your money at some point if something unexpected happens with a startup's tech then fine.  Legacy banks regularly demonstrate that fallibility is everywhere - RBS, TSB etc. etc. not unique to startups.

Nonetheless - I am personally very negative about "app only" as a concept. 

If an app is the only channel supported then it is hostage to screwups, broken updates, obsolete phones, outages etc. 

A serious bank should have more than one channel to transact on and more than one to deal with problems on.  Support inside the app being a particular bugbear.  And I don't see why the bank should get to randomly tell me when to get a new phone or completely lose access to my money.  The fact that many people roll phones regularly on contracts does not make this true 100% but if they choose that model and don't want to attract my money then - that's fine. 

But from a business continuity standpoint - you'll struggle to convince me

Whilst I have a certain amount of sympathy with your views, I can't deny that your post made me think of the early days of the motor car, when the village constable would walk in front of said motor car, waving two red warning flags while the driver followed slowly behind. Not that I am old enough to have witnessed this.

As you say, fallibility isn't limited to the fintechs. To reduce our risks, we are well advised not to rely on just one single bank / bank account, whether it's an app-only or a bricks and mortar one.

Albermarle

Daliah said:

gm0 said:

Your safety in terms of FSCS protection to 85k per insitution is the main issue.  And if you can stand waiting for your money at some point if something unexpected happens with a startup's tech then fine.  Legacy banks regularly demonstrate that fallibility is everywhere - RBS, TSB etc. etc. not unique to startups.

Nonetheless - I am personally very negative about "app only" as a concept. 

If an app is the only channel supported then it is hostage to screwups, broken updates, obsolete phones, outages etc. 

A serious bank should have more than one channel to transact on and more than one to deal with problems on.  Support inside the app being a particular bugbear.  And I don't see why the bank should get to randomly tell me when to get a new phone or completely lose access to my money.  The fact that many people roll phones regularly on contracts does not make this true 100% but if they choose that model and don't want to attract my money then - that's fine. 

But from a business continuity standpoint - you'll struggle to convince me

Whilst I have a certain amount of sympathy with your views, I can't deny that your post made me think of the early days of the motor car, when the village constable would walk in front of said motor car, waving two red warning flags while the driver followed slowly behind. Not that I am old enough to have witnessed this.

As you say, fallibility isn't limited to the fintechs. To reduce our risks, we are well advised not to rely on just one single bank / bank account, whether it's an app-only or a bricks and mortar one.

The established banks all have apps . The couple I have work fine , but if there was an issue , or I lost my phone etc , then I can go to their website for 'traditional ' internet banking. Best of both worlds and even better, one has a branch in the local town.

A branch might seem an archaic idea nowadays , but only recently my OH found it useful when she had a problem and has proved very useful for less straightforward issues like setting up DWP appointee accounts, probate etc . The call centre and even counter staff are often misinformed on these issues and having contact with the branch manager can get things sorted out more quickly. 

gm0

@Daliah the idea indeed applies to the individual as well as the institution.  Don't just have one account and be in a world of hurt when a TSB or startup major failure event happens.  And you stand there with no means of payment and your small business just stopped. No cash. Can't pay the mortgage etc. etc.  You see them on the tv and feel sorry but it is partly self inflicted pain. And hopefully people learn for next time

But I don't buy the new vs old motorcar/horse and carriage walking in front argument at all. 

Apps are a temporary fashion of our age.  Riddled with hidden privacy invasions and worse.   Open web was a thing - a light that failed.  Phone around for longer. First Direct was good when it started.  Branch and paper and cheques for centuries. 
Mag strip debit cash cards for 40-50 years.  Chip/pin for less. Contactless recent. NFC wallet more so. 
Of course it changes and it always will. 

But I stand 100% behind my view that a serious organisation needs to have more than one independent channel as the approach - this being regularly examined and minimised in terms of single points of failure across them. To better keep service and support going for their customers when the inevitable failures occur.

Disaster Recovery doesn't exist if it isn't regularly exercised.  Serious datacenter people with critical applications run on both sites people like (some) banks and stock exchanges keep pinging operations back and forth to make sure it's all still working all the time including the people and the procedures and will indeed run normally immediately on site 2 if site 1 is snafu.
Nothing allowed to get rusty.   Cheapskates don't do any of that. And their services go down more often and sometimes for a few days where the first lot would be back up in an hour if they vanished at all + any time to deal with the state of data if corruption was a big part of the story of the incident

After a lifetime chasing down enterprise IT operational screwups in large organisations and watching the supposedly infallible become entirely fallible. I am not prepared to entertain positively the idea that a business model demands "only one way" as the solution if you wish to be taken seriously and used for something critical.

Or that a small innovation such as apps on phones is somehow magically new and different when they patently just are not.  Apps on phones is just a flavour of PC client/server installed apps again from the 1990s.  Pretty but a terrible idea then.  And a terrible idea now.  But now with added privacy invasions.  But the same configuration management versioning and update disaster zone

You can certainly make large scale IT hold up for a decade or more without a splash but then something will happen over a 20 year period. Look at the history of the stock exchanges or airlines or the major banks.  Or indeed AWS, IBM, Microsoft Azure cloud platforms upon which so much now depends.  Theoretically one can deploy across them and across regions of the world and use CDNs and much else to become more insulated from any one when an Amazon or a Microsoft buy the farm on a given day for 24 hours with a network change one morning.  Or like most people using them you can not bother with the added complexity - use the cloud as is and whatever you do will occasionally just disappear from time to time.  Not often.  Just now and then.

Plus ca change. Plus ca la meme chose.

penners324

Of course the whole idea about old phones becoming obsolete for banking apps is about security.

The older the phone the less secure it becomes. After awhile it's not possible to update the phone with the latest security updates or even the operating system updates.

All banks do this, as well as WhatsApp  Facebook etc.