IBS Journal October 2015


Standing room only: digital banks


line up to service mobile-only market The UK digital banking market is getting crowded as an ever-growing number of digital banking start-ups vie for attention. Fidor Bank, Tandem Bank, Secco Bank and Monese are among the latest entrants. Who (if anyone) will make a noticeable difference?


by Alex Hamilton & Antony Peyton


Fidor Bank Germany-based direct bank, Fidor Bank says it is the first challenger bank to launch in the UK since 2010 (when Metro Bank arrived on the scene). The online bank is now live and says it


is already a ‘big success’ in Germany with 90,000 customers. Matthias Kröner, CEO of Fidor, says the


bank has a ‘personalised approach’ and ‘gives every customer a voice in how our bank is run, as well as giving them unprec- edented control – [such as] setting their own interest rates, or naming the current account card that the bank will use’. The first services available to UK cus-


tomers will be saving bonds and Single Euro Payments Area (SEPA) transactions. Users are ‘financially rewarded for giving and receiv- ing knowledgeable financial advice, as well as evaluating Fidor’s products and services’. Fidor says it also provides a ‘60-second


banking service’, with customers able to com- plete any financial transaction ‘within one minute’. Over the next few months Fidor will intro-


duce a current account, debit card, corporate account and will also integrate third party services to offer its customers a marketplace of ‘curated’ financial services, such as peer-to- peer lending and crowdfunding platforms. The operations are supported and run


on Fidor’s own core banking system, pur- pose-built to encompass the bank’s nuanc- es. The system is written in Ruby on Rails, with Apache web server and MySQL data- base. It runs on Linux as the operating sys- tem and has web 2.0 interfaces. The system supports fully-fledged cus-


tomer accounts, including account opening due diligence, loans, deposits and payments. Fidor has now set up a separate tech- nology subsidiary, Fidor Tecs, to sell the


40 © IBS Intelligence 2015 www.ibsintelligence.com


software white-label to other direct bank- ing start-ups, mobile operators and retail- ers. The CEO of Fidor Tecs, Frank Schwab, says that there has been some interest in the system already from a variety of ver- ticals, and the company – with a head- count of over 30 – is gearing up to take the system international, with eyes on Spain, Poland and Scandinavia. Fidor Tecs also resells Fidor Bank’s


crowdsourcing/peer-to-peer lending tech- nology, which integrates with the client’s existing back office using web interfaces, as well as its e-commerce payments platform. It also has a tie-up with the Currency Cloud, a UK-based cloud mobile wallet service. Fidor leverages the Currency Cloud’s TCC Connect offering to underpin its FidorPay Account e-wallet, which allows customers to store and transact multiple currencies, as well as precious metals and virtual currencies. Last year Fidor said it was gearing up


to launch in Russia, but this seems to have been delayed as it says it is now planning a launch later this year. In Russia, it will launch its community-based banking ser- vices on the core system of a local bank, with Fidor’s proprietary technology at the front-end.


Monese


Monese is targeting those who might find it initially difficult to open a bank account in the UK – immigrants and expatriates – by offering them the ability to start banking with it in just three minutes via a passport and selfie. It has recently launched a beta testing phase


for owners of Android phones and says that it already has 50,000 names on the waiting list. CEO and founder of the bank, Norris


Koppel, spent ‘several stressful weeks’ upon arrival in the UK trying to open an account in what was a ‘slow and bureaucratic’ pro- cess. From that experience, the firm states


focus: digital banking


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