The Challenger Banks Are Coming
Banking seems to be the next sector to face major disruption by start-ups. The old banking model is being challenged by banks who are putting consumers at the heart of what they do. Across the world, the customer base of these challenger banks is expected to more than double by 2020 (Allied Market Research).
Challenger banks are offering greater transparency, with simple, user-friendly apps that allow people to manage their finances quickly and easily. They also tend to focus on how they can help people save money by giving them accurate up to the minute spending reports and breakdowns.
However, as Jess Goodfellow points out in her article in the September issue of The Drum, the traditional banking model has always relied upon generating profits from customers becoming more indebted to them, which could be completely undermined by these new apps helping people to save money. The challengers may offer trust and transparency, but banking is an expensive business – Monzo loses £50 per customer per year, mostly because of the international fees it covers, meaning they lost nearly £8million in 2016. They aim to break even in 2018.
So the challenger banks may be coming, but they may not have deep enough pockets to stay. However, even if the challengers don’t make it, they still represent a major challenge to established banks. Offering a faster, more convenient service with greater transparency empowering consumers to know more about their finances has raised consumer’s expectations. They will expect the same of the big banks, who must innovate or risk losing increasing numbers of customers.
There may not be a challenger bank with enough funds to bring down the established brands, but these new brands are posing questions that the big banks will have to answer. By putting consumers at the heart of their models, they are driving reform in the fintech sector by solving consumer pain points and empowering them to take a more active interest in their finances. Put simply, providing a better experience is winning them customers and established banks need to do the same.
Reebok: Shoppable Social
Reebok is making all its social media channels fully shoppable to create a seamless experience for people from the moment of discovery until the point of purchase. Working with martech company Curalate, it will start with Instagram where people who see images and videos on the brand’s accounts will now be able to easily buy the products.
KFC: Pay with your Face
At a new KFC in Hangzhou you can pay for your food with a smile. No need to carry cash, a card or even a mobile phone now to get your fried chicken fix. You simply place your order at a kiosk which scans your face, analysing more than 600 facial features. Once it matches an photo ID image stored in its system, you just type in your phone number and the payment goes through. Smile power.
Jagermeister: Gig in the Sky
Modestep have partnered with Jagermeister to play the most extreme of the brand’s Ice cold gig series yet. Suspended thousands of feet in the sky between mountains in New Zealand using a space net, the gig will be captured by 360 cameras to beam it to fans.