There is a new #challenger #bank in town, and yes, it is planning on launching with physical branches. The newcomer, U.K.-based iam bank, will launch later this year with both prime digital tools—mobile offerings, machine learning algorithms, and chatbots—as well as with real, touchable bank branches, specifically tailored to appeal to the millennial consumer base. […]
Bank Innovation
#Challenger #banks start #from a pretty grim position – most of them don’t have any customers. So how are they #scaling? Well, whatever they do, it’s important they consider the word scale from both a backend operational perspective and a frontend on-boarding perspective. My view is the most brilliant challengerRead More
Bank Innovation
External forces from demographic, social, economic and regulatory phenomena have contributed to one of biggest revolution in the banking world: the emergence of #challenger #banks.
Digitally-focused challengers such as Atom, Fidor Bank, Mondo and Starling, have grown significantly in 2015 and 2016, fueled by changing customer expectations, the new Generation Z, the heavy smartphone use in accessing finance and emerging technologies.
Most of the innovation around #fintech and challenger banks have occurred in regional hubs and heavily supportive countries and environments, according to a new #report by Burnmark, including the UK and the US.
“The UK holds the first mover advantage as a home for challenger banks, but new geographies are gaining ground with support from government, regulators, investors and entrepreneurs,” the report says.
&8220;The US, Singapore and Australia, in particular, are actively competing to create best-in-class financial innovation ecosystems and are increasingly progressive in their use of government and regulatory policy to support challenger banks.&8221;
In early 2014, the UK Financial Conduct Authority launched the Project Innovate to support regulation for innovative businesses. Singapore has a £100m financial sector #technology and innovation scheme and Australia has announced a £500m national innovation and science agenda.
The UK also leads in terms of fintech investment, having generated £524 million in 2015 compared with £3.6 billion in California and £1.4b in New York in 2015. The country has an unrivalled lead in terms of financial expertise, employing 1.2 million people in the financial services industry.
Following the UK, Singapore has been increasingly active in policy and benefits to make it an attractive fintech hub. In November, the Monetary Authority of Singapore, the country’s central bank and financial regulator, will organize the week long Fintech Festival which will bring together policymakers, fintech experts, entrepreneurs and VC to discuss the future of finance.
MAS has also opened its fintech innovation lab called Looking Glass @ MAS to experiment fintech solutions with financial institutions, startups and tech vendors.
According to the report, the emergence of challenger banks are &8220;multi-fold&8221; and dependent on the regions they belong to. For instance, in developed markets, challenger banks are gaining prominence due to the underlying inefficiencies of the incumbents in service the customer in the best possible and transparent manner.
Emerging markets on the other hand are looking at challengers as a medium to accelerate banking innovation as well as financial inclusion. With mobile penetration increasing significantly in these locations, banks utilizing digital channels to onboard, engage or serve customers are evolving to become an important medium for financial inclusion initiatives.
Notable ventures include Abacus, a digital bank backed by a UK-based private equity firm AnaCap; Metro Bank, which implemented Backbase’s Omnichannel Banking Platform for its digital banking front-end, FIS/SunGard’s Ambit Asset Liability Management solution and outsources mortgage processing to BancTec; Monzo Bank, which has been built on open source stack including Linux, Apache Cassandra, and Google&8217;s Go programming language; Secco Aura, which uses a distributed database similar to the #Bitcoin #blockchain which allows data to be stored on customer&8217;s devices as well as the bank; and Tandem Bank, which uses FiServ&8217;s core banking and its Agility platform on SaaS.
Featured image: Bank via Shutterstock.
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In 2015 and #2016, a new breed of challengers have emerged – the digitally focused challengers, such as Atom, Fidor Bank, Monzo and Starling, are continuing to grow with a number of them seeing improvements in profitability.
Image by MaximP, via Shutterstock
According to KPMG, total profits for the challengers increased by £194 million against a drop of £5.6 billion for the UK’s Big Five: HSBC, Barclays Bank, Lloyds Bank, The Royal Bank of Scotland and the UK subsidiary of Santander.
These challengers are distinguishing themselves through transparency, superior data analytics, cheaper banking services and simpler business models that provide them a cost advantage.
#Challenger #banks shouldn&8217;t be confused with neo-banks. While neo-banks offer a mobile-first banking experience in partnership with a traditional bank, challenger banks aim at becoming fully-licensed banks, creating new data-driven banking experiences and pricing models.
Today, we take a look at the world&8217;s top ten neo-banks and challenger banks.
Atom Bank is a UK digital challenger bank founded in 2014 by Metro Bank co-founder Anthony Thomson. It received a full license from the Bank of England in June 2015 and launched in full after its regulatory authorization restrictions were lifted in April 2016.
Atom Bank aims at offering mobile personal banking and savings as well as business banking, loans, and mortgages. The startup has raised over US$ 166 million in venture capital from BBVA, Toscafund Asset Management, Anthemis Group, among others.
Founded in 2011 by Brett King, Moven is a neo-bank that partners with CBW Bank on its direct-to-consumer product. Moven provides a mobile first experience platform that connects a bank&8217;s products to the end consumer experience.
Moven&8217;s app comes with a debit card and contactless payment sticker. The app provides real time spending insights that aims at motivating customers to make smarter decisions and save more. The startup has raised over US$ 24 million in funding so far.
WeBank, the online banking affiliate of Chinese Internet giant Tencent Holdings Ltd., is China&8217;s first digital challenger bank launched in early 2015. Its name comes from WeChat, Tencent&8217;s popular instant messaging and social networking app.
WeBank was the first private bank to start operations under a pilot, after the banking regulator granted licenses to six similar institutions in 2014.
Earlier this year, WeBank raised over US$ 450 million in a funding round led by US private equity firm Warburg Pincus, a deal that valued the venture at more than US$ 5 billion, according to the Wall Street Journal.
Launched in June 2015, MYbank is Alibaba and its affiliate firm Ant Financial&8217;s response to Tencent&8217;s WeBank. Similarly, MYbank is a challenger bank that provides an entirely digital banking experience.
MYbank was released two years after Alibaba, China&8217;s e-commerce giant, rolled out a personal wealth fund called Yu&8217;e&8217;bao.
MYbank was the country&8217;s second digital player to receive a banking license.
Simple, initially known as BankSimple, is an American neo-bank founded in 2009 that has partnered with Compass Bank and The Bancorp Bank for banking services.
Simple provides FDIC-insured checking accounts and is part of the STAR network for surcharge-free access to around 55,000 ATMs.
Simple was acquired by BBVA in 2014 for US$ 117 million to accelerate the bank&8217;s “digital banking expansion.”
Founded in 2013, N26, formerly known as Number26, is a German digital challenger bank aimed at revolutionizing the traditional banking industry.
In July 2016, N26 received its German banking license and simultaneously announced the extension of its financial platform as well as the addition of the bank&8217;s first investment product.
The initial N26 Invest product for German customers is offered in cooperation with Frankfurt-based startup vaamo. Customers can use N26 Invest to put their money into portfolios right from the N26 app.
N26 has raised over US$ 50 million in funding so far.
Launched in Munich in 2009, Fidor Bank is a German digital-only challenger bank that develops banking services and solutions for the digital generation. Fidor Bank launched in the UK in September 2015 having applied for a UK banking license in January 2015.
Licensed in Germany, Fidor Bank serves over 120,000 account holders and some 350,000 registered community members.
In 2014, Fidor became one of the first banks to use the Ripple internet-based payment protocol.
The bank was acquired in July 2016 by France&8217;s second largest group for banking and finance, Groupe BPCE for an undisclosed amount.
Headquartered in London, Starling is a licensed mobile-only challenger bank founded by former Allied Irish Banks COO, Anne Boden in 2014.
In July 2016, Starling received its banking license from the Financial Conduct Authority.
Starling focuses on offering a limited selection of services, centering around current accounts. The app, which hasn&8217;t launched yet, will offer alerts for smarter money management and real-time monitoring.
The venture has raised US$ 70 million in funding so far.
Monzo Bank, formerly known as Mondo, was set up in 2015 by Tom Blomfield following his exit from rival challenger Starling.
Monzo is a challenger bank based in the UK that is known for setting the record for &8220;quickest crowdfunding campaign in history&8221; when it raised £1 million in 96 seconds via the Crowdcube investment platform.
Monzo was granted a full banking license &8220;with restrictions&8221; in August.
Founded in 2013, Tandem Bank is known for being the second challenger bank to be granted a banking license in the UK in December 2015.
The company plans to offer digital services including current accounts, credit cards, and loans via its mobile app and website.
Tandem Bank hasn&8217;t launched its app and yet, the company is reportedly valued at £65 million.
The post The World&8217;s Top 10 Neo- and Challenger Banks in 2016 appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
#Monese, a UK-headquartered mobile-only #challenger #bank, has launched its iOS app alongside a refreshed Android app.
Monese lets you open a UK current account almost instantly even without a UK address or credit history, all through the app.
Opening a Monese bank account is quite simple and only requires a snapshot of your passport and a selfie. Monese is available to customers located in Europe.
The banking account comes with a (free) contactless Visa Debit card, which allows you to purchase goods and services online and in store, withdraw cash from ATMs globally, as well as deposit cash at any shop with a PayPoint.
The Monese app works pretty much like any other banking app: you can receive payments, send money at home or abroad (8x cheaper than using a traditional bank), pay your bills and manage your money on the go.
Monese primarily targets immigrants, digital nomads and the expats community who often have to experience challenging tasks when opening a UK bank account as foreigners.
Named ‘Best Challenger-Bank’ in Europe, the startup has been awarded €1.1 million by the European Commission for research and innovation.
Monese, one of the first 100% mobile current account services to launch in the UK back in September 2015, is registered by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money.
Since the UK&8217;s financial regulators loosened rules for new entrants in 2013, a host of startups have applied for banking licenses in order to take on the established lenders. Monese, but also Mondo, Atom Bank and Starling, have that one thing in common: they are all engaging with customers almost entirely through digital channels.
In April, app-only bank Atom Bank launched its iOS app in the UK and is currently looking to replace passwords with biometrics banking. The company is authorized with restrictions by the Prudential Regulation Authority (PRA) and regulated by the FCA.
Atom Bank is backed by BBVA, Anthemis Group, Polar Capital Holdings and Toscafund Asset Management, and has raised over US$ 170 million in funding so far.
In May, Viacom Media released results of a survey of over 10,000 millennials on their perception of banking. The survey found that 73% would be more excited about a new offering in financial services from leading #technology companies than from their own bank.
Image: Millennial Generation by William Perugini, via Shutterstock.
Engaging with millennials, a growing population of 80 million individuals in the US along with radically different expectations from their predecessors, has become a top priority for #banks. Growing up in the age of the Internet boom, millennials have ushered in the rise of mobile apps, crowd-source funding, digital peer-to-peer payments and online banking.
According to the Millennial Disruption Index, 68% believe that in five years, the way we access money will be totally different and 70% say that the way we pay for goods and services will completely change in five years.
Interestingly, 33% believe they won&8217;t need a bank at all in five years, and almost 50% are relying on tech startups to fundamentally change how banks work today.
The post Mobile-Only Challenger Bank Monese Releases iOS App appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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