Urchana Moudgil Co- Founder and COO at Upgrade Pack


Fintech had a moment in 2018. The UK fintech scene overtook the US in terms of investment and cemented its position at the front of the peloton in Europe. In 2018 valuations rocketed and unicorns roamed the City, as fintech started to go mainstream.

2018 was the year the mass market warmed to the idea of a digital only bank. Before 2018 incumbent banks were safe, because consumers didn’t expect much more than the service they’d got used to. Digital banks have changed the game, their customers are evangelists for their chosen challenger, sporting their colourful cards in bars across East London. They like it when their bank tweets happy birthday @them because banking for them is a sharable experience

The API Economy

That’s not to say traditional banks are going anywhere soon. It’s just they’re going to have to work harder to maintain market share, they need to find new ways to reward and engage their current customers. In response, a number of the big banks are embracing the API economy, partnering with fintechs to steal some of their sparkle (as well as their tech). Banks are increasingly partnering up with fintech providers to create new agile products and services that are tailor made for individual consumers, like flexible loans that adjust in real time as an individual earns more (or less) over the lifespan of the agreement.

But it shouldn’t just stop at financial products, services and infrastructure. Banks need to start to partner with fintechs in every aspect of their business to both retain and attract customers. One way of doing this is by adopting tech led, platform-based loyalty and reward programs.

Loyalty deserves rewarding

Why? Unlike many of the baby-boomers and even Gen X and Y’ers before them – Millennials will switch banks and are unforgiving of mistakes. They need to feel special. They need rewarding. Their loyalty deserves it, in a market place where the grass is getting greener on the other side every day.

Banks need to adapt their loyalty and reward programs in order to stay relevant. The issue is many of these programs have become indistinguishable. They need innovating. Legacy IT and a focus on acquisition are holding back top tier banks from innovating in this area. But they need to, unless they start focussing far more on customer engagement they’re going to continue to lose market share to the challengers.

Trust is not enough

Banks in the past have relied on consumer trust. They’ve considered themselves untouchable when it came to trust comparisons with the new kids on the block. But that too is changing. Research indicates that UK millennials now trust PayPal and Visa more than they do their banks. They also have deep relationships with Apple and Amazon, tech giants rumoured to be not too far away from moving into financial services.

As long as traditional banks remain of the mindset that consumers need to trust and not love them, they remain at risk. It’s imperative in 2019 that traditional banks do all they can to excite and delight their most valued customers, if they don’t some hot young thing with a coral card will.



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