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A Finextra member
A Finextra member 01 July, 2015, 11:50Be the first to give this comment the thumbs up 0 likes

The headline is certainly attention grabbing, partly because it channels the worlds' largest building society's marketing and partly because it channels a quote attributed (quite possibly erroneously) to Bill Gates c1993: People need banking, they no longer need banks. But the evidence in the UK is somewhat contrary.

The TSC, Lord Vickers, the EU. the FCA, the CMA et al are all so obsessed with promoting competition in UK banking precisely because banking has consolidated in the years since 1993 and customer inertia to switching is massive (see my blogs on why CASS has so far made no real difference to consumer behaviour  ).  

As for 8 million customers? That's the whole of the switcher market for almost 3 years. Based on current evidence the cost in terms of cost incentives will swallow up more than all of Atom's investor funding...just ask the current winners in this space - Santander and Halifax. Ok, some of these will be new accounts rather than switched but perhaps someone ought to let Atom's investors know that the number one source of new accounts is the one channel Atom doesn't have - hint: it's located in a high street near you.

Looking at the super wallet elements I don't see anything in there that most of the majors in the UK either do not currently have in play, live testing or development for live launch before the end of the year. Granted a small pure digital bank can no doubt do it slicker and quicker and with more magic in a very nice package but the banks are pretty close to a 'good enough' solution for the vast majority of customers in the UK. And when you have huge inertia and largely a zero-sum outcome from switching, I suspect 'good-enough' will usually win out over 'fancy but completely unknown digital start-up'.

 

A Finextra member
A Finextra member 01 July, 2015, 11:54Be the first to give this comment the thumbs up 0 likes

Not wanting to appear a complete luddite but some issues with posting the link:

blog.gfk.com/2015/06/cass-18-months-so-far-so-what/

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 01 July, 2015, 16:40Be the first to give this comment the thumbs up 0 likes

I've long believed that sales happens primarily in branches, both in India and USA (https://twitter.com/s_ketharaman/status/615497632274886656). From @IanD's "hint", I guess the same is true of UK. Neobanks are right in assuming that (A) providing a place to park money - aka bank account - is a commodity business and that (B) money management is what will differentiate them. However, they're living in a fantasy world if they believe their strengths in (B) will overcome their weakness in (A). Especially since banks' digital offerings are getting better day by day. In fact, in India, some of the best digital banking solutions have come from banks. Latest example: PayZapp from HDFC Bank.

HDFC Bank's PayZapp Ends My Bill Payment Woes

Balasubramaniam Gd
Balasubramaniam Gd - DBS - singapore 20 July, 2015, 09:49Be the first to give this comment the thumbs up 0 likes

It can actually be a smart phone, to a tablet and to a virtual network called banks, can we relate to Apples push to do away with the SIM card or the similar initative from Google, guess its going to be a combination of complexities.  A game between pull and push.

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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