The IT infrastructure management company worked behind the scenes with major challenger Metro Bank before launch, assisting them on innovative technologies and systems that would allow them to stand out.

Peter explained to Bridging & Commercial Distributor how new players in the market were challenging the way we bank by providing the seamless, convenient experience that today’s customers demanded. 

“By simplifying their products, services and processes in this way, challengers are able to reduce the inefficiencies that many established financial institutes face after finding themselves attached to legacy platforms and struggling with a lack of agility.

“It is true that fintech is generating topical discussion and driving innovation in the banking sector, however, the success of [a] challenger bank is more about improving the service the customer receives, rather than simply relying on fintech alone.”

However, regulatory legislation could be a challenge for new banks with it becoming increasingly complex and ever-evolving.  

“Many entrants have limited resources to help figure out the breadth [of] legislation applied by the regulators, and therefore risk delays in going to market with a product that fails to comply.

“Collaboration and knowledge sharing is essential to overcome this issue, and the FCA’s Project Innovate is an excellent example of this.”
 
The new regulatory sandbox, which was launched by the FCA earlier this year, also helps challengers to test innovative new offerings before launch.  

“Initiatives such as these help to cultivate transparency and clarity across the industry, and create a level playing field for challengers to compete with the well-established traditional banks.  

“Ultimately, the challenge for new entrants will be improving efficiencies and cutting out unnecessary processing. They cannot achieve this alone, and must collaborate with established banks, however.

“By adopting fintech with limited disruption to operations, new entrants to the lending market will be able to use their data to truly understand the customer and adapt their offering to suit, and ultimately improve the customer experience.”