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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
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'.
Not wanting to appear a complete luddite but some issues with posting the link:
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
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
This post is from a series of posts in the group:
A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.