The Royal Bank of Scotland has invested in digital current account aimed at students and young people that has set out to rival challenger banks Monzo and Starling.

The £2m investment in fintech startup Loot was made through Natwest’s digital-only retail bank Bo, which is due to launch this year, and takes its total shareholding to 25 per cent following an initial £3m investment in July last year.

Loot launched in 2014 to help students manage their finances and now has more than 175,000 sign-ups.

Verified customers are provided with a pre-paid debit card and are offered insights into their spending habits, with the option to set daily or weekly budgets.

Bo chief executive Mark Bailie said: “Loot is a really exciting brand and one that we’re proud to be associated with.

“Through its innovative use of technology and intention to change the status quo, it’s quickly built a following of loyal customers, with potential for rapid future growth.”

Other investors in Loot include Speedinvest, Global Founders Capital and Portage.