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through an implementation of Temenos’ T24 platform. Knox tells IBS Journal that the migration process to Tandem’s systems was underway as soon as the ink had dried. That was part of the attraction of the deal, too, he adds. The relative age of Bankmaster gave Tandem an opportunity to go ahead with a core banking switch in the middle of the acquisition.
“The guys at Fiserv have been fantastic, too,” says Knox. “Their standard sale involves massive migration projects so they’re super experienced, they know everything inside out and have been incredibly supportive. I won’t even go into some of the historical problems that we had to deal with, but the process is going smoothly now.” The transformation is earmarked for completion at the end of the quarter.
How to win customers and influence people
Now, with the Harrods acquisition propelling it to the top of the challenger bank rankings, how does Tandem plan to differentiate itself in a crowded market? We put it to Knox that perhaps some
We’re not building a bank, we’re building technology business that happens to be a bank
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Atom Bank, states Knox, does mortgages and fixed-term savers. “You can see there’s a traditional bank balance sheet build going on there, but that isn’t our strategy,” he says. Monzo and Starling, he adds, aren’t building a balance sheet at all: “They’re essentially tech businesses aiming to do banking as a platform.” Tandem has always sat between the technologists and the traditionalists, argues Knox: “We’re not building a bank, we’re building technology business that happens to be bank.” Why? Because of the £52 billion UK retail banking revenue pool available, current accounts made up only £8 billion in 2013, according to the CMA, and a large part of that is in “overdraft fees that hit you when you’re down”. When you break it down, Knox adds, the current account market is a relatively small one.
people are starting to get a little fatigued by the sector, but he disagrees. “I don’t think that’s the right word, but perhaps it is in your line of work,” he says with a smile. “When I started my first remittance business there were about 800 companies in the UK doing exactly what we did.” When it comes to challenger banks, states Knox, his main competitors add up to just a few dozen at most.
“If you take it down to the retail banking competitive set, who we’re really up against, there are 10, maybe 12 names.” Knox adds. He suggests that the only reason why the challenger market is so striking is that banking has had little to no new entrants for decades. People get confused between that and proper competition. “Don’t get me wrong, there are other new banks coming into the industry, but how many are going straight for the retail banking sphere?” he asks.
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