Staying Agile: The Key to Longevity for Today’s Challenger Banks

Mon 22nd May 2017

The term ‘challenger banks’ is fast becoming a misnomer, such is the level of diversity displayed by today’s diverse range of financial services providers. At one end of the spectrum are the mobile only banks, like Atom, Monzo and Starling. These are true start-ups and focus on delivering an entire banking experience via the device in your pocket. Then there are the digital contenders, like Fidor Bank, whose ambitions and customer-base extend beyond the mobile environment to encompass online banking and API links to social networks. Also in play are the banks that, despite being branch-based, are rethinking the traditional approach. Metro Bank - open seven days a week - is a case in point. If that wasn’t enough, there is also the range of specialist banks that focus specifically on vertical industries, Virgin Money and M&S Bank, for example. With such diversity on display, it’s getting harder and harder to nail down what it is that brings them together under one coherent category.

One suggestion is that they all share the need to operate differently, with far greater agility than their traditional high street counterparts.

These young, new lenders operate fleet-of-foot, unencumbered by the legacy systems and entangled processes that have long-hampered the bigger players. Innovation is the key to their success; each strain of challenger has a different view of the world, but all are committed to delivering a customer service experience which is both fresh and carefully differentiated.

But as ‘the challengers’ continue to grow they are starting to face some very familiar challenges. How can they scale their operations, creating and dedicating resources to accommodate more customers, more accounts and more products? These issues seem so familiar because they are a mirror reflection of the very banks that they are hell bent on challenging.

So what can they do to avoid getting bogged down? Put another way, how can they protect the agility which has, so far, been such a key ingredient in their success?