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1 IN 4 MILLENNIALS AND GEN-ZS ARE USING CHALLENGER BANKS WITH MONZO THE MOST POPULAR

A survey of UK consumers by digital banking solutions provider CREALOGIX has uncovered trends in the adoption of mobile-first challenger banks.

 

There’s a quiet revolution happening in banking. A survey of 2,000 UK consumers commissioned by CREALOGIX has found 1 in 4 under 37s have confirmed they are using digital-only challenger banks and 14 per cent of UK bank customers across all age groups have at least one mobile-only digital banking provider. Up to a third of under 37s have two or more accounts with challenger banks.

While the major banks maintain their dominant market share of current accounts at 87%[1], the digital-only banks are gaining ground amid high levels of activity in new account opening. 44% of survey respondents have opened at least one new bank account in the last 5 years, increasing to almost 80% of Gen-Zs.

 

61% of UK bank account customers are thinking about opening an account with a new provider in the next three years. This trend increases with Millennials and Gen Zs, with 75% looking to open a new account in the next three years. Take up of the digital-only challenger banks is three times higher amongst these age groups, demonstrating the extent to which the preferences of the digitally-savvy younger generations are driving the disruption of the market.

 

The research also suggests newcomers are picking up market share at a rapid pace. German challenger bank N26 feature in the survey results even though they only just launched in the UK in October 2018. 3% of Gen-Zs and 2.5% of Millennials surveyed said they have an N26 account, which would include people who signed up for early access or are still on a waiting list.

 

The survey of 2,000 consumers by CREALOGIX also revealed the most popular mobile-only digital challenger banks: Starling, Revolut and Monzo – Monzo being the most popular for the under 37s. (While Starling Bank and Monzo are licenced banks in the UK, Revolut currently operates via an e-money licence in the UK and uses passporting to distribute its offering across other European Union markets.)

 

Preferences changed markedly for older respondents, which overallare much less likely to use a challenger bank – only 6% of over-55s said they had an account with one of the leading challenger brands. Those who do have accounts with challengers preferred to use Revolut and Atom Bank.

 

After the financial crisis of 2008, market share of the major high street banks concentrated, with over 80% (and at times as much as 90%) of personal current accounts (PCAs) held in only the biggest six firms[2]. Soon after this a YouGov survey (2013) on public trust in banking found that consumer satisfaction was at an all-time low.

 

The new CREALOGIX research asked UK challenger bank customerswhat they liked best about their bank. Customers repeatedly highlighted ease of use, customer experience, accessibility, flexibility and innovative functionality such as the ability to lock bank cards temporarily, and get mobile notifications and visual summaries about spending activity.

 

When asked what they liked about using a digital challenger bank, one interviewee said: “This is probably the easiest account I have opened. It’s the only account I have where you can nominate the date your interest is paid and that predicts the amount of interest due for entire term of deposit”.

 

Another interviewee said: “I love how easy it is to use, how I can freeze my card and alter my settings on the fly and use the card freely abroad. I love my Monzo and Starling accounts because they are easy to use and easily accessible. They help me to budget my money and achieve saving goals.”

 

Jo Howes, Commercial Director at CREALOGIX UK, said: “The big question of fintech in the UK has been whether the new banks could eat into the highly centralised market share of the top tier banks. We are now seeing figures that clearly show the challenger banks are making rapid progress and gaining market share. The figures and rate of change are enough now to make incumbents sit up and take notice. Our research shows that consumers are attracted to the convenience, usability, and personalisation available from the challengers. To respond to the challenge, established banks need to accelerate their digital transformation and prioritise customer-oriented features and benefits.”

 

Anton Zdziebczok, Head of Product Strategy at CREALOGIXUK, said: “When they announced a limited beta launch recently, N26 had over 50,000 new UK customers on a waiting list. We are used to seeing lines around the block for new iPhone releases, but this is surprising for a bank account. For the first time, people are actually excited about what’s on offer from a bank. This is no accident because the challengers are using consumer-oriented design and marketing strategies to reimagine what banking can look and feel like. The question for incumbents – including both bank and building societies – is how they can transform their own offerings into something with enough appeal to compete with this influx of innovative competitors.”

 

The independent study was undertaken by Censuswide between 7-12 November 2018. It interviewed 2,000 18-65 year olds who currently have a bank account.

 

Media and industry specialists who wish to find out more about digital banking solutions from CREALOGIX can book a consultation via their website at: https://crealogix.com/uk/products/crealogix-digital-banking-hub/

 

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Banking

ADVANTAGES OF OFFSHORE BANKS: WHAT THEY HAVE TO OFFER MILLENIALS

Contrary to popular belief, offshore banking isn’t just for the super-rich, nor is it illegal.

In reality, and with professional advice, the average person can open a perfectly legal offshore bank account within a matter of hours – ideal for busy, on-the-go millennials.

 

For the generation facing increasing financial challenges, it is more important than ever for millennials to acquire savings sooner, rather than later. With climbing house prices, higher relative costs of living, and the need to save more money for retirement, many millennials are planning their futures’ by setting up savings accounts in overseas institutions. But is this the most secure way of holding your hard-earned savings?

 

TRUSTS

James Turner

While the answer to this question is largely dependent on individual circumstance, there are many potential benefits to banking offshore; from earning higher interest rates and tax benefits, to having the ability to bank in foreign currencies. Offshore banking can be particularly beneficial for those who regularly travel overseas for work, as it allows you to receive multiple currencies without the need to pay for exchange fees. As such, there’s no risk of you losing out on exchange rate fluctuations.

 

Banking with confidence and having more security is a significant factor for people choosing to bank offshore. It can offer greater asset protection against possible future threats, such as divorce lawyers, creditors and legal action – which is essential for millennials with substantial amounts of money. This makes offshore banking a secure solution for managing your money well. However, it is worth noting that the security of your savings will depend on the regulations of where your bank is based.

 

For an added level of reassurance, many jurisdictions also offer strict, financial privacy and confidentiality agreements. This means that your personal information will not be passed on to any third parties, so your assets are shielded to safeguard your individual or company information.

 

At Turner Little, we offer privacy-assured banking to suit your bespoke needs. Whether you’re an individual or a business, our services include arranging bank accounts and credit cards with both UK and offshore institutions. So get in touch with us today and see how we can help you prepare for your future.

 

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Banking

CODAT PARTNERS WITH VISA TO GIVE EUROPEAN BANKS ACCESS TO SME FINANCIAL DATA

Codat – a London-based technology company that connects the internal systems of small businesses to banks, fintechs and other financial institutions, allowing business data to flow back and forth in real time – has formed a strategic partnership with Visa.

 

Via a single API, Codat enables financial service organisations to integrate with a wide and growing range of accounting, banking, and commerce integrations platforms. It means banks and lenders can get a holistic financial profile of a small business in a matter of minutes rather than days, allowing credit risk to be assessed faster and more accurately, and speeding up time to decision for the applicant.

 

The partnership agreement is tied to the launch of the Visa Fintech Partner Connect program in Europe – a new marketplace where Visa is partnering with a roster of carefully selected fintech businesses. It will provide Visa’s clients with access to a suite of next-generation digital banking solutions and capabilities from across the financial services spectrum, helping them to quickly bring new solutions to market.

 

Working with Codat, Visa’s clients will be able to create a fully digital journey for their SME customers, from onboarding, to underwriting, to account and portfolio management, with a single point of connectivity between their customers’ accounting platforms and data sources. Codat’s connectivity to an SME’s financial data will form the most up-to-date picture of a business’s financial health.

 

Through its commitment to integrating with a wide range of data sources, Codat ensures Visa and Codat clients will always be offered the broadest and richest access to key business financial data.

 

“This is a major stamp of approval and validation of the quality, security and scalability of the platform our team has built,” said Pete Lord, CEO at Codat. “Visa has recognised that we address a universal pain point in SME financial services: the manual, slow, and limited exchange of financial data between businesses and their service providers. Our modern API technology provides the means to do this better, giving Visa’s clients the ability to offer SMEs a suite of improved and more agile products and services, as well as reduce their own operating costs.”

 

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