IBS Journal March 2018
29
without a mobile-focused proposition, their popularity is waning, and we’re starting to see them try to catch up with the digital and mobile pioneers. Metro Bank, for example, was launched with a branch-heavy approach, but it has been closing branches in the past year, and only recently we’ve seen it steer toward mobile.
Starling, for example, is a mobile-only bank, for both consumers and business, and one that comes with very strong financial management features. N26 follows the same pattern. But Atom was the first in the UK to take the mobile-only route. We ask Atom’s Bromley about the app, which has more baggage than other homologous banks. “The mobile app was built on Unity 3D, which is an engine used to design videogames,” he says. “In fact, many of the developers came from the gaming sector, and have created a dynamic information architecture using 3D, animations and other graphical features. The aim is to create an intuitive, easy-to-use and visual experience, that can also widen the target demographics of a digital bank.”
Nevertheless, while Starling and N26 have pushed heavy for financial management tools, Atom has taking a bit of a diversion. “At the moment, we have limited financial management capabilities,” says Bromley. “We have realised that predictability is more important, and an app that can help you in future expenses is more helpful than one that can tell you what you have spent your money on.” At the end of the day, economically dire millennials need all the help they can get.
N26’s Weber insists that the success of the bank’s app comes down to talent: “By working with the best tech talent that would usually be interested in working with the most successful digital players, but definitely not in a traditional bank, we are able to further iterate and constantly bring our product to a new level. All of our platform and app has been developed in-house.”
Weber adds: “The user experience is one of the most important aspects of the product. As such, the N26 app is easy to use for anybody. We have found 40% of our customer base is over 35, which shows that challenger banks are not just for millennials, but for anybody of any age who is looking for contemporary mobile banking.”
More importantly, these digital and mobile enterprises are gaining momentum, and are turning heads around the global. Regulators are adapting to the markets’ demands, and even in the UAE, where Clearly is based we’re seeing active change. “Our onboarding is fully digital, excluding the final step,” says Cunningham. “This is one of the issues that will be fixed in the summer, as there has been enough pressure for the regulators to allow institutions like us to use AML and KYC tech to identify each customer.”
consumer to control how their bank is run is something the big banks cannot do, and gives fintechs an edge
“ Giving power to the
N26’s Alex Weber: The user experience is one of the most important aspects of the product
Breaking the ice
We have already seen several examples where these banks have made an impact in the industry. Perhaps their market share is still small – negligible in some cases – but they are becoming the talk of the town with their digital and customer-centric initiatives. We mentioned Metro Bank’s change in strategy towards digital, and Clearly’s Cunningham told us about the active regulatory change we have seen in the UAE. But that’s not all.
Institutions from around the world are keeping an eye out for these changes, with some actively reaching out to learn and implement similar strategies. Cunningham is proud of the MoU opportunities that have presented for them. “The MoUs that we have signed in Pakistan, Nigeria, and now looking into places like Egypt are a proof the increasing demand for digital, smartphone-focused banking proposition, even in places beyond Europe and the US,” he says.
If we are knee-deep in the digital era, it’s about time banks catch up. “We spend more and more time on the phone and social media,” adds Cunningham. “In consumer terms, this is how people like it. Challenger banks cannot afford branches, but people don’t even want them.”
N26’s Weber says that they expect huge shifts in the market in the next five to 10 years. But in order to see these, they cannot be on their own. A quote by Atom’s COO is perfect in summing up the challenger philosophy: “Our goal is to change the industry, and it takes more than just Atom to do this. Yes, we might be in competition with some of the other challenger banks, but we are looking years ahead, and the change we’re seeking can’t be achieved on our own.”
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