In the constantly changing world of technology, digital-only/challenger banks have started launching their own specialized banking products across mortgages, commercial loans, etc. These banks offer excellent reward schemes to customers nationally and internationally via secured mobile apps and debit cards. Some of the key features include budget management, fewer fees for cash withdrawals and card transactions abroad (based on the bank’s remit in applicable countries) quicker processing ranging from opening an account in a few minutes to acquiring a personal loan, getting approvals on mortgages and a commercial loan, etc. These, digital-only challenger banks are customer-focused and extremely fast-paced. As such, they are becoming the frontrunners in this market, with a growing customer base in the UK. Especially popular among 20–45 year-olds, they are now introducing next-gen platforms, such as crypto trading, which can increase their customer base even further.
Today, all banks invest heavily in IT, thus changing the IT landscape, but they are still hindered by their conservative processes and operations overhead. As a result, challenger banks have started dominating most of the traditional UK banking market.
People tend to think that the bigger the bank, the safer their money is. This thinking is common in those above 55 years of age. Currently, 18% of the population in the UK is over 65 and these people lack the tech skills needed to manage mobile applications. In fact, many above 75 don’t even know how to use an ATM. Traditional banks and building societies should focus on this population while they build new digital platform and help them with innovative, out-of-the-box ways of banking.
To remain competitive, traditional banks can do something out of the box:
- Special biometric ATMs
- A bank set up in a supermarket with limited banking options This will massively reduce infrastructure cost
- Simplifying various operational process using the latest technology, such as robotics process automation, use of AI or partner with a service provider to rightly meet the IT goal in terms of simplification and customer focus
- Waiving off traditional account fees to attract more people
The adaptability and agility to change with challenger/digital-only banks are extremely high with the use of latest technology. I expect the next few years to be interesting, with a veritable revolution in the UK banking industry.
Population % – Office of National Statistic
Age References –
Authored By: Chaitanya Joshi
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