Challenger banks are newer, more specialised banks that often operate online through mobile banking services. To learn more about the challenger banks and their unique approach to banking, we spoke to COO of Judo, Lisa Frazier.

On the bank’s specialised focus on SMEs, Frazier comments: “Improvements in banking for SMEs starts by recognising they are different. They are not like consumers or large corporates; they have unique needs which requires servicing in a differentiated way. Our research indicates that trust between banks and customers is broken – in fact, SMEs give banks 2 out 10 on trust and two-thirds of SMEs rate their relationships with banks as low. Building trust back into banking is our purpose and our challenge to get right.”

Frazier explains that the ”high touch – high tech” approach at Judo Bank relies on human-driven customer relationships. They pride themselves on the prioritisation of customer interaction and advice from their bankers, supported by data-driven experiences and digitisation to streamline the services the bank has to offer.

Commenting on Judo Bank’s strategies in tech, Frazier states that data democratisation and cloud-based data platforms is critical to outperform competitors and ensure client information is secure and protected.

“Our bank was born in the cloud, so we have a cloud native technology stack. This provides us with cost advantage and flexibility versus traditional competitors who have large amounts of legacy systems,” Frazier explains. “We are a ‘technology-as-a-service-first’ organisation, meaning we buy services from technology partners to deliver our core services cost competitively. An example is the use of nCino, our account origination platform. We build what differentiates us and what is not available in the market.”

Speaking to how challenger banks can innovate, Frazier advises that they should find a specialisation and master it, develop and act on customer value propositions, and invest in technology with clear and measurable goals to demonstrate progress.

“While it is people who drive banking decisions, technology assists. Judo's model of getting to know our customers (including in-person visits to customer locations), understanding their needs, and building deep relationships with them, regardless of their location is a high touch model,” Frazier says. “Our bankers can make in-market decisions as they have the technology at their fingertips. We are fully cloud based and use collaborative technologies to enable sharing of information, a seamless single platform for customer lending and access to data.”

Frazier adds that Judo Bank is working towards phase two of their development strategy and looking to scale up post IPO.