The notion of fintech (financial technology), isn’t exactly a new concept, with online banking dating back to the 1980s. Even if you’re not significantly aware of it, fintech is like a big part of both your personal and professional life. You might split the bill at dinner by using Venmo, tap your phone to pay for your drink with Apple Pay, and payfor your Uber home with a stored credit card – or even using one of the many cryptocurrencies.
What was once maybe considered an exotic alternative to traditional banking, reserved for early adopters and adventurous millennials, the sheer breadth of tools, platforms and services that fall under the umbrella of fintech services, and its ‘user-friendly’ implementation, has caused financial technology to excel in popularity across a range of target audiences. Ernst and Young’s 2019 Global FinTech Adoption Index cites the adoption rate of fintech as more than two-thirds (64%) globally, up from 16% in 2015, with three out of four consumers using the innovative payment solutions. Currently, the global fintech market is valued at around $127.66 billion (2018), with expected growth to $309.98bn, at an annual growth rate of 24.8% through 2022.
In recent times the rise of ‘Challenger banks’ who utilise financial technology to their optimal advantage, have disrupted the banking and financial markets. Fintech banks have gained the upper hand thanks to their customer-orientated strategies and lean operating models – free of legacy system issues. They are able to leverage new technologies like ‘the cloud’ and artificial intelligence to offer a highly unique customer experience, centred on personalisation, speed and seamless delivery. Incorporating such technologies like these ensures quality customer service and maintains a competitive edge above the ranks of traditional banks, who are still grappling with legacy structures and process-orientated restrictions.
So, what can ‘Challenger Banks’ offer you? –
Seamless customer experience
From unrivalled fast and paperless onboarding to customised products and services, fintech banking solutions can offer you everything your high street bank does, and more. Offering features such as data sharing with accountants, invoice creations, multi-account dashboards, multi-currency dashboards and more, the plethora of available additions to everyday banking provides extraordinary value to the business. The implementation of Artificial Intelligence (AI) across a range of their platforms, means that customers have 24/7, easily accessible advice and insights on monetary and payment solutions. And, to top it all off, all of this can be accessible in just 10 minutes with fast account set up. By effectively using online databases and technologies, the majority of ‘challenger banks can promise customers quick onboarding and approvals, meaning that those who are eager to get started, can do so.
Technology and innovation
Challenger banks are born of today’s financial technology – which now accounts for 11% of the worldwide market. They operate at the forefront of technological developments, allowing their customers to benefit from this, a wanted refreshment from the seemingly stale and stagnant operations of the traditional banks. By evading the outdated structures of brick-and-mortar high street banks, fintech ‘challenger banks’ are more flexible and able to continuously evolve and innovate.
Lower operating costs
Fintech ‘challenger banks’ utilise their leaner virtual operations and lower operating costs to formulate attractive competitive rates for their customers. The majority of ‘challenger banks’ do not charge monthly fees for using their business bank accounts – a welcome change for a majority of businesses who would typically have to pay within a range of £5 to £25 per month.
Businesses who typically operate internationally will also find an added benefit of low-cost cross border/currency rate. ‘Challenger banks’ have gained a lot of popularity for offering zero FX fees or fees with withdrawing money at an ATM abroad. Meaning that; if you are someone that spends a lot of time working overseas or regularly sends money abroad, this can be a saving of hundreds or thousands of pounds in FX fees each year.
However, ultimately what works best for your business stems from individual business needs. Many companies opt to stick with their ‘tried and tested’ banks, which is understandable, especially if you retain a relationship with said bank. For those who are at a crossroads on addressing their financial operations, or if you are a new start-up looking for direction on managing your businesses financials, the information above should validate the notion that challenger banks are worth a consideration! At Animo, we work with a number of modern banking institutions and would welcome the opportunity to see how we can help you.
For further advice and insights on best practice for your business and finances, please do not hesitate to get in contact with one of our trusted consultants, either via the contact form below, by calling us on +44 (0) 207 060 0835 or emailing us at firstname.lastname@example.org.