Atom, which will offer services online and have no branches, is one of a number of new British banks hoping to challenge the dominance of the country's biggest lenders, whose reputations have been hit by a series of scandals.

It has already raised 25 million pounds ($39 million) from investors including leading fund manager Neil Woodford and is seeking a further 75 million pounds to fund its lending, Chairman and founder Anthony Thomson told Reuters on Thursday.

"Already, we've had new people saying 'we want to talk to you about investing'. Literally yesterday and today we've had some new conversations so I think we will finalise the raising of the money in the autumn," he said in an interview.

British lawmakers and regulators are keen to see new banks emerge to increase competition in a sector where four big players - Lloyds Banking Group (>> Lloyds Banking Group PLC), Barclays (>> Barclays PLC), HSBC (>> HSBC Holdings plc) and Royal Bank of Scotland (>> Royal Bank of Scotland Group plc) control more than three-quarters of the personal current account market.

But some analysts say new banks will not be able to gain enough customers to break that dominance because of the reluctance of British customers to switch bank accounts.

MOBILE APPS

Atom hopes to benefit from the surge in usage of mobile banking applications over the past two years and declining demand for in-branch banking.

"I think we're in the right place at the right time. When we started talking about this very early in 2013 we thought the future was going to be mobile but the rate of uptake has surprised even us," Thomson said.

The bank expects to gain a competitive advantage from using new technology, rather than the decades-old legacy systems run by some larger banks.

Atom will offer a full range of retail banking services including personal current accounts, savings products, home loans and small business loans.

Chief Executive Mark Mullen told Reuters in May that it is targeting a 5 percent share of the personal current account market over the next 5 years.

Thomson, who was also a co-founder of new lender Metro Bank, said it would introduce products in stages over a period of up to six months following its launch in the fourth quarter.

Woodford currently holds a 40 percent stake in the bank and is expected to remain its cornerstone investor, Thomson said.

Other existing investors include venture capitalist Jon Moulton, former chair of Goldman Sachs Asset Management Jim O'Neill, businessman Peter Vardy and Polar Capital.

(Editing by Elaine Hardcastle and Pravin Char)

By Matt Scuffham