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CHALLENGER BANKS Rise of the neo-banks
Are challengers simply better at banking than incumbents, as their supporters claim? Or is talk of revolution all hype, no substance? Scott Thompson investigates
are here to save the day from bloated incumbents who have taken their customers for granted for way too long. Unencumbered by legacy technology and outdated processes, these ventures (with their lower operating costs and digitally clued up management) are aiming to drag banking into the 21st century. That, at least, is the narrative being pushed by the new kids on the block. But what is the reality?
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A good starting point is US venture Moven, which is something of an old hand at this game. It started life as a mobile-only challenger bank, but now concentrates on a SaaS solution enabling other FIs, such as New Zealand’s Westpac and TD Bank in Canada, to accelerate their digital transformation initiatives. Last year it launched in Canada with TD under the TD MySpend moniker. TD now boasts over 800,000 registered users, a result that exceeded target projections by almost 400%. Westpac,
change is gonna come. Challenger banks
meanwhile, launched version 2 of the Moven service in the form of CashNav and got to 90% of its mobile user base in just six weeks. TD performance data shows that 30% of its customer base using the app have reduced their spending by around 10% solely because of MySpend. One million users are live with Moven in three countries, and in 2017 it expects to hit somewhere between 5-10 million app users in at least six countries.
“With Moven smart savings launching in multiple markets in 2017, we expect to be generating world- class mobile cross-sell numbers and deposit generating behaviour at a fraction of typical acquisition costs,” says Brett King, Founder and CEO, Moven. “In the last quarter of 2016, we completed three major commercial deals that fund us at least for the next two years, and gives us line of sight to $20 million in revenue for 2017. A 300% increase on our performance this year. It was a great way to finish out the year.”
www.ibsintelligence.com © IBS Intelligence 2017
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