IBS Journal September 2016


35


recent KPMG report A New Landscape as the ‘digitally focused challengers’. Alongside Mondo, other new players including the likes of Atom, Fidor and Tandem are building banks without a physical presence. For each, personalisation is a key tenet of the customer proposition. Tandem, for example, is exploring ideas as to how its app can motivate users in a similar way to a fitness app, such as spotting opportunities to help them save money or grow what users’ already have with motivational nudges.


Mondo also sees its role as going beyond a simple mobile app delivering statements to customers’ mobiles. Blomfield suggests a modern bank should help its customers with day-to-day problems. “It’s not so much about ‘can I get a mortgage quickly’ but ‘can I easily collect loyalty points from the retailers I shop at without carrying an extra card around?’ Or ‘if I forget to tap out on TfL will my bank tell me about it and help me to get a refund?’ Or ‘if I want to stick to a daily budget, will my bank help me to do that?’ It really is those minute-to-minute hassles we want to help people solve.”


Standing out


Meanwhile, even newer market entrants are looking to change the very foundations on which banks are built. Having become frustrated in his role at a major UK FI, Chris Gledhill, left to build the UK’s first ‘blockchain inspired’ bank. “I realised I could affect a lot more change in the industry working outside-in rather than inside-out,” he says. “I could deal with the frustrations of working for a large organisation because I’d done that for most of my career but I realised if I’m actually going to change something, which was mine and my co-founders’ motivation, we realised the best way to do that is through a startup vehicle rather than through a corporate vehicle.”


Secco cannot be accused of a lack of ingenuity: Gledhill and his team are growing a company that is not only built on new technology but challenges the very premise of banking and the purpose it serves, as well as the currencies it deals in. Like most other challengers,


Gledhill says it is easier for genuine innovators such as Secco to stand out in an increasingly crowded marketplace. “For the more generic challenger banks, who are going down the existing well-trodden route of getting a banking licence and becoming a lender, they will find it more challenging to steal customers from the likes of Barclays, Lloyds, Santander and RBS. People are generally a lot more trusting of banks than people give them credit for and it’s going to be difficult for some of the challengers to wean people off of their big banks unless they’re truly differentiating in some way.”


Rishi Khosla, Founder and Chief Executive of one of the UK’s newest challenger banks, OakNorth, says it’s too simplistic to rule out new players because they use some of the same platforms, such as Oracle, as the larger incumbents. “The difference is that because of their size, they’re able to adapt to changes in the market much more quickly and easily than the larger banks, and aren’t bogged down by legacy IT infrastructures because


Secco doesn’t have a branch network but neither will it have an app. It’s a cross between a bank and a social network, where users can earn coupons and tokens from interactions with other users.


It’s not all about money, either. Gledhill is calling on users to become ‘data brokers’: “we decided to give people the ability to reclaim their information and monetise their data, just like Facebook makes money out of your information. We’re saying if you hold your own data you can make money out of it. Your data becomes a currency on our platform.”


He is currently working on a proof of concept in the fashion industry, “because fashion is so different to banking we thought if it could work in fashion it can work anywhere”. In this trial, fashionistas will be able to earn tokens if other users like items they’re wearing. If they then purchase the item, the original wearer will earn a referral bonus. “Retail stores get a whole new sales channel; every one of their customers is now a walking mannequin for their brand. And the person doing the reviewing gets a discount on the item that they’ve seen they’d like to buy.”


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