Where next for the challenger banks?

By Rebekah Tunstead | 11 October 2018

As new challenger bank N26 comes to the UK market, the question of how far the challenger banks can go to dominating a customer’s financial life is being asked all the more frequently.

When prompted on whether N26 would look to become the app for everything, Alex Weber, N26’s head of international markets, said the appetite for such an app does not exist in Europe or the US.

“At least in Europe and the US customers are fairly reluctant towards this app monopoly, especially, with recent topics of Facebook and so on,” said Weber.

“But that’s something more for the future, from my perspective, it’s something that is not heavily demanded by our customers in Europe. We are very close to our customers; we use user research and conduct interviews every week. Not one customer has come and asked to integrate taxi bookings into our banking app.”

However, Tinkoff - a Russian based bank - sees app domination as its main objective. The bank plans to become the number one customer app not just for banking, but for every aspect of the customer’s life.

“We’ve built an ecosystem around our Tinkoff customers. We built a special Tinkoff ID which is like a key to our ecosystem and we provide different services for our customers. It could be a service like buying airline tickets, or buying insurance,” said Alexander Emeshev, the bank's chief new products officer.

“What we want to do we look at the mobile phone app as a centre of the life of a customer, we understand that we want to be in the top five for most used mobile apps for our customers.”

And Tinkoff isn't the only bank with that outlook. Curve’s CEO, Shachar Bialick announced the bank's latest card development, the curve metal card at the PayExpo event, in London earlier this week.

The new card comes with a range of additional features. Worldwide Travel insurance, £50m medical coverage, a collision damage waiver, connections with premium retailers so customers can get 1% cashback, and gadget insurance.

“Mobile wallets don’t work because the infrastructure isn’t there. That’s why Apple Pay didn’t work,” said Shachar Bialick, Curve CEO.

There remains to be progress in connecting physical cards with mobile banking apps according to Rachna Ahlawat EVP and Co-founder of Ondot Systems. The move from physical card to mobile bank is reliant on mobile phones’ facilities.

“I think what we have to look at is the capabilities that exist on your phone. That is what will actually allow the card to be moved into your phone.”

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