Damn those pesky new digital banks. The online only banks are raising the bar for customer expectations and experiences which causes headaches at the ‘traditional’ banks. The digital banks have created new niche products for younger customers and have even involved those customers in developing those new products. Gasp! What a great idea and something only a smaller and more nimble bank can do.
So, just who are these pesky digital banks? Well, the most well known are in Europe BUT they are coming here to the US. Like NOW. Bank N26 (catchy) just raised $160M to fuel expansion here and other markets. Revolut, another UK challenger, is planning to launch in the US this year, and yet another, Monzo is rumored to be coming too. Yeah, I know, banks with ‘funny’ names will never catch on, right? Well RBS has taken notice and is rumored to be starting a digital “sub brand” to fend off the ‘newbies’. Need those younger tech savvy customers.
(Bill Taylor/Managing Editor)
“The Europeans are coming.
Challenger bank N26 raised $160 million in Series C funding this week to fuel its expansion to the U.S., and other markets, later this year. Revolut, another U.K. challenger, has been planning a U.S. launch this year too and Monzo is rumored to follow.
Digital-only challenger banks have changed customer expectations, including customer service and how customers want to use financial products. Big banks are taking notice, with companies developing sub-brands to hook younger, digital-savvy customers or others — the most recent of which is rumored to be the Royal Bank of Scotland.
“They’re showing the art of the possible of what a nimble, more tech-driven bank would do, and the biggest way they’ve done that is customer experience,” said Celent analyst Stephen Greer. “[With big banks] you have legacy technology and culture issues with branches; big banks have cannibalization concerns, and there are a lot of compliance issues.”
Here are three ways digital-only banks are responding to customer expectations better than banks…”