This U.K.-centric discussion of plusses and minuses to consumers provides a useful review of the digital-only “challenger banks” that have caught the imagination of many consumers. In looking at their advantages it is noted that:
Digital only banks have the capability to champion app-based services which aren’t offered by mainstream banks, whether that’s due to a lack of demand or a lack of commitment on the part of high street banks.
Mobile banks respond to the needs of an increasingly digital country where information is expected to be available constantly at the click of a button. So, some mobile banks have included functions that help customers manage their finances such as:
- Spending notifications in real-time
- Spending reports
- Spending projections
- Links with other financial assistance apps
Along with this, mobile banks are also adapted to the way we live in the 21st century by, for instance, allowing bill splitting via the app in an age where fewer people carry cash.
Traditional banking apps can feel clunky in comparison to mobile-only apps, with some services only available either on their online computer-based banking services or in branch
As Mercator notes in its soon to be released report, Digital Consumer Banks in the U.S.: Your Money or Your Wallet, a similar phenomenon is occurring in the U.S., with Fintech firms and their bank partners offering enhanced digital wallet services as a primary product, but in many cases not a lot more. As noted in the article, consumers could be both motivated and frustrated by these product offerings:
It’s worth remembering that not all digital banks offer the same functionality as customers might have come to expect from a traditional bank, so be sure to check carefully before signing up.
Before signing up for a mobile-only bank, it’s worth checking not only which services and facilities they offer but also what the original target market was. While mobile banks will naturally evolve, this original aim could be just what you were looking for anyway.
In the U.S., Mercator’s forthcoming report illustrates a diverse and highly competitive digital bank marketplace, encompassing legacy banks as well as fintech startups across five institutional segments. From the standpoint of online deposit-gathering, the U.S. digital bank market is quickly evolving and is widely accepted by consumers. But one constant on either side of the Atlantic is that consumers need to read before they commit. Challengers may own the “non-bank” image, but they don’t have a monopoly on competitive innovation.
Referenced article by – Choose
Overview by Ken Paterson, VP, Special Projects and Director, Customer Interaction at Mercator Advisory Group