McNamee kicked off the session by discussing comments made by Janine Hirt, CEO of Innovate finance, last week to City AM about the maturity of the EU market compared to the UK fintech market, where key fintech players are already becoming substantial parts of the financial services system.

In light of this maturity, McNamee questioned whether neobanks or challengers in the UK are no longer in the early stages of innovating or ‘challenging’.

To better understand this, she first addressed how the internal cultural and HR practices strategies that seem to have come the norm in challenger banks . Turning first to Kristensen, McNamee asked whether the cultural initiatives within neobanks are forcing incumbents to reassess their own approach to cultural and internal management.

Kristensen responded that “it is changing people’s perceptions of what it is like to work in financial services. I think back to when I started my role I wouldn’t have expected to come to a financial services conference with a three month old strapped to myself, or a CEO that is championing a three day work week… as a result, the pool of talent has gotten much bigger.”

Adding to this Mullen stated: “I would make a distinction between the things we have done to innovate in regards to our employee value proposition, such as our four day work week, as distinct from things we’re continuing to innovate to compete.”

Continuing on this argument, Mullen pointed to the fact that banks make the majority of their money from interest on lending. He argued that “creating a business that's attractive to employees, as opposed to creating a strategy and business model that's designed to compete in lending, they're not strange bedfellows, they work quite well together, but they're not quite the same thing.”

McNamee then questioned Mullen over whether marketshare was a good benchmark for how neobanks are challenging traditional financial institutions.

Mullen: “I don’t think you should hide against the measure. Some say it’s market share giving us a measure of success. Others say that it’s the fact that neobanks have made huge inroads in regard to either customer numbers or volume.

He continued that “one of the biggest banks in the UK wastes no time, and certainly spends as much money as they can to tell you, they’ve been here for 250 years. That’s quite the head start. By contrast, most of the neobanks in the UK are very junior institutions by comparison. So it takes quite a long time to build anything organic. The neobanks and challengers that we're talking about our organic businesses, whereas actually, the big banks that dominate the UK are not organic businesses, they've grown by acquisition over many, many years.”

“The fact that we’re small relative to the Titans doesn't make the Titans quite as strong as they ought to be. Because many of them are very inefficient, they didn't necessarily deliver customers and not necessarily trusted. There’s quite expensive hurdles beyond banking networks and technology infrastructure that you've got to overcome on a level playing field.”

Kristensen added that “so many of the features that were introduced by challenger banks, whether it was Atom, Monzo, Revolut, OakNorth, Starling. So much of that innovation has been copied by the large banks because that is the sort of user experience customers are demanding. So it is helping to drive innovation from some of the larger players. But as Mark said, they do still have the burden of legacy.”

Kristensen continued: “There’s generally customer-led innovation coming from those copycat features, but I think there’s still a long way to go before you can say that the challenger banks are really offering a genuine challenge.”