57% of millennials indicated they’d leave their current bank for one with better technological options.
Source: Strategy Desk
An Understanding of the Customer Proposition This is crucial, and being missed by some of the challenger bank entrants. The goal isn’t to create some cool technology that’s a digital-first bank. That might acquire you a few customers, but the true goal is to create a product that:
• Solves problems • Does so reliably • Does so quickly
Challenger banks have the opportunity to perfect their service around one specific problem and create a winning app experience. They can start from scratch (no legacy issues hanging over them) and become as specific, or as local, as they want. This combined degree of flexibility and specificity makes it a very attractive modern financial model. Take Monzo Bank, for example. Widely hailed as one of the foremost digital banking upstarts, Monzo is strong on the principle that “It’s time for a new kind of bank.” Now consider the fact that Monzo only opened Current Account options to a select group of beta testers in August, 2017. It has built an entire audience on the “actually easy to use” concept, leading with pre-paid cards and transfers, and have a pipeline of new users eagerly awaiting each roll out.
THE BOTTOM LINE 57% of millennials – already becoming the biggest spending section of the market – indicated they’d leave their current bank for one with better technological options. Any generations superseding the millennials will likely feel the same. Technology + experience will rule the day in banking, and that’s where challenger banks are initially carving out a place for themselves. Challenger banks are becoming profitable faster, and the space is ripe for quick revenue gains – if you understand exactly what steps, processes, and partners need to unfurl for success.
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