Small is the New Big: HOW CHALLENGER BANKS ARE CAPTURING CUSTOMERS’ HEARTS (AND WALLETS)
Technology + Experience Gave Us The Challenger Bank Story In 2013, five years removed from the financial meltdown, YouGov ran a study on the banking profession. A tough 84% of respondents indicated that bankers were “greedy and get paid too much.” Public trust in United Kingdom banking was at an all-time low – and this was a half-decade after the crash. Change was afoot, however. That same year, the Bank of England unveiled a simple two-step process with lower initial capital requirements. In lowering the barrier to entry for banking and creating essentially digital-first establishments, the challenger bank was born. Challenger banks are beneficial in part because they enter the market with no established concepts around: • Their technology • Their reputation/brand In terms of technology, the core benefit lies in the fact that legacy banks are often saddled with legacy IT structures. Challenger banks can build their software infrastructure from the ground up. (They can also partner with platforms). Because the focus is typically digital-first, the construction and maintenance of brick and mortar locations isn’t necessary either. Oftentimes, the end result for the customer is an entirely mobile or digital banking experience. This creates real-time, wholly transparent results about where your money is and how it’s performing. As of late 2016, many challenger banks are scoring higher on trust and reputation surveys than conventional banks. It’s still a tough slog for these challenger banks, though. Not only do they need a suite of products, they need a suite of products that are significantly better than any established banks. When the cost of switching involves one’s finances, said switching costs can be a high bar for many.
Many challenger banks are scoring higher on trust and reputation surveys than conventional banks.
© 2017 PROVENIR ALL RIGHTS RESERVED
Made with FlippingBook Digital Publishing Software