Four-day week easier than hybrid working, Atom Bank chief says

The boss of UK digital bank Atom has said that implementing a four-day week has been “considerably less challenging” than navigating the rise of remote working, as the business posted its first annual pre-tax profit.

The bank, which in 2021 introduced a four-day 34-hour working week for all employees without cutting pay, had since experienced lower staff attrition and sickness, said chief executive Mark Mullen.

“Planning and implementing our four-day week initiative has been considerably less challenging than navigating post pandemic, flexible working,” he said. Atom’s working from home policy offers complete flexibility with no mandatory days in the office.

Flexible working patterns could lead to managers being “afraid to ask their employees to come back to the office” and a “rebelliousness” among the workforce about having to come in, Mullen said. By contrast, the shorter working week came with clear expectations for the bank and its staff.

“With four-day working, we planned the shift patterns, we planned the changes, we consulted on the changes of employee contracts . . . you’ve got a resourcing model that delivers your business . . . that’s not what happened with flexible working.”

Mullen’s comments come as Atom reported its first annual pre-tax profit of £7mn in 2023, after increasing its loan book by 40 per cent to £4bn. The lending growth was underpinned by a 55 per cent increase in residential mortgage balances to £3.2bn.

Atom launched in 2016 as one of the first app-based banks in the UK, gaining its banking licence ahead of rivals Monzo and Starling. However, it has struggled to expand as fast as competitors and does not offer current accounts.

“As far as I’m concerned, building an outstanding company is better than building a big mediocre one,” said Mullen. “The world does not need another average bank.”

He said Atom was “fast . . . easy to use and . . . [offered] customers a better deal” on interest rates.

A funding round led by shareholders including Spanish bank BBVA, private equity firm Toscafund and London-based Infinity Investment Partners gave it a £362mn valuation last year.

Atom said its use of technology for loan underwriting allowed it to provide agreements in principle for commercial loans within one working day.

The challenger bank was in 2022 forced to delay its initial public offering plans because of a difficult market. Mullen, who was previously chief marketing officer at HSBC’s first direct, said that reaching profitability would give investors more confidence about a potential listing. However, he did not want to be “hostage to a date”.