29 April 2017
visit http://events.sap.com/gb/fsi-forum-2017/en/home

Cherry-picking banking startups shed 'challenger' label

03 March 2017  |  5702 views  |  0 digital banking

PwC says it is working with 15 firms who are preparing to apply for banking authorisation in the UK, reflecting the continued attraction of the market for cherry-picking startups.

PwC says ‘challenger’ banks in the UK are casting off the tag as they continue building their market share by focusing on customers who prefer multiple accounts in order to get the best deals.

In a report produced in collaboration with the British Bankers' Association, PwC says that in 2015, ‘challenger’ banks supplied 200,000 British consumers with mortgages, and increased their share of small and medium-sized enterprise gross lending to 20%, providing new loans and overdrafts to around 50,000 SMEs.

The study finds that the new breed of banks are in the main bidding to pinpoint customer needs that are currently underserved by incumbents, rather than usurp them altogether.

In a survey of 2000 consumers conducted for the report, 54% said they would prefer to bank with multiple providers in return for the best deal on products they offer.

John Lyons, head of retail and commercial banking at PwC, says: “Many of these banks don’t anchor their propositions around current accounts as they recognise that customers are willing to multi-bank. This was substantiated by our survey, with over half of British consumers surveyed preferring to use a range of banks for different products and services, according to which is best placed to serve them."

He says that at least eight new banking licenses are currently being processed by the regulators, reflecting the attractiveness of the sector.

"Additionally PwC is also working with close to 15 firms who are preparing to apply for a banking authorisation,” he adds.

Nor is the influx of new entrants likely to slow down. While new banks face considerable structural challenges around capital requirement and regulatory issues, the move to Open Banking is expected to create even more opportunities for smart startups to enter the market.

“Open Banking is set to drive a fundamental change in the banking landscape," says Lyons. "If the regulators take action to further develop competition, the future market will be increasingly varied resulting in a very different banking experience for customers. While new players must work hard to prosper, we believe there will be room in the market for many different banks and non-banks to succeed.”

Download the full report:» Download the document now 2 mb (PDF File)

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Ogden takes the wraps off ClearBank

Ogden takes the wraps off ClearBank

28 February 2017  |  7168 views  |  3 comments | 9 tweets | 14 linkedin
RBS to become fintech fund and high street outlet for challenger banks under HMT remedy

RBS to become fintech fund and high street outlet for challenger banks under HMT remedy

20 February 2017  |  11121 views  |  0 comments | 42 tweets | 34 linkedin
In digital age, customers still want human touch

In digital age, customers still want human touch

26 October 2016  |  10687 views  |  2 comments | 22 tweets | 28 linkedin
Banks reap app rewards but face threat from new mobile challengers

Banks reap app rewards but face threat from new mobile challengers

16 September 2016  |  7109 views  |  0 comments | 13 tweets | 12 linkedin
UK banks accuse challengers for not offering fee-free accounts

UK banks accuse challengers for not offering fee-free accounts

21 July 2016  |  6227 views  |  4 comments | 10 tweets | 9 linkedin
UK regulators set up unit to help bank startups

UK regulators set up unit to help bank startups

20 January 2016  |  6851 views  |  0 comments | 26 tweets | 15 linkedin
The game changing challengers out to rock the banking world

The game changing challengers out to rock the banking world

06 January 2016  |  9267 views  |  1 comments | 35 tweets | 17 linkedin
Challenger banks boosted by UK Government

Challenger banks boosted by UK Government

01 December 2015  |  6121 views  |  0 comments | 22 tweets | 10 linkedin

Related blogs

Create a blog about this story (membership required)
visit dh.comvisit vasco.com/news/PSD2-compliant-solutionsVisit capgemini.com

Top topics

Most viewed Most shared
Six global banks join Swift DLT trialsSix global banks join Swift DLT trials
7708 views comments | 15 tweets | 36 linkedin
BBVA steps up fintech acquisition strategy with purchase of OpenpayBBVA steps up fintech acquisition strategy...
6960 views comments | 17 tweets | 16 linkedin
Should central banks open up payment and settlement systems to non-banks?Should central banks open up payment and s...
5977 views comments | 22 tweets | 21 linkedin
Token raises $15.7 million as PSD2 approachesToken raises $15.7 million as PSD2 approac...
5923 views comments | 20 tweets | 20 linkedin
hands typing furiouslyMobile Technology, Its Importance, Present...
5677 views 0 | 2 tweets | 1 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job