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You're spot on. I'm in strategy and we monitor the challenger banks regularly. Very little money is earned from things like current accounts, which is what all
by tixocloud 8y ago
You're spot on. I'm in strategy and we monitor the challenger banks regularly. Very little money is earned from things like current accounts, which is what all these app-only banks. Money is to be made in loans, mortgages and credit cards. Despite all the great hype, they are still a tiny proportion of the number of customers that mainstream banks have.
Great app, great user experience but would be interesting to see how profitable these challenger banks are.
- md_ 8y agoFWIW, revolut appears to be aimed st selling different (probably lower overhead) services. Their premium accounts offer higher withdrawal limits, but they also sell cellphone insurance, etc. Still, as a skeptic, I can’t shake the thought that they’re just building market share at low profitability based on VC overexuberance.
- Semaphor 8y agoN26 offers loans, insurance managing (both via 3rd party but integrated) and premium accounts as a way for them to make money.
- lngnmn1 8y ago> Money is to be made in loans, mortgages and credit cards. Indeed, and for that you have to be a Wells Fargo-like behemoth with your own legal team, abilities to handle defaults, etc, etc. Big banks are big for a reason. Most of the app-only "banks" wants to be your transaction processor for a fee, essentially a middlemen. This is a standard strategy.