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Challengers can transform the UK’s banking landscape

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AST month’s disappearance of 600,000 RBS customer payments and direct debits, with all the chaos that entailed, was a wake-up call not just for the taxpayerowned bank, but for the entire industry. In the twenty-first century, customers do not expect to be told their money has gone missing because of an IT meltdown and that it might take three days to fix the problem.Yet the UK’s banking sector is dominated by legacy institutions with creaking infrastructure designed for a pre-electronic age. Archaic technology systems mean this won’t be the last IT disaster to inflict the industry. But the shortcomings of the traditional banks are an opportunity for the new generation of challenger banks. The “Big Four” - Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland – have long dominated the High Street, controlling 77 per cent of the current account market and 85 per cent of small business banking. In recent years the likes of Metro Bank, Aldermore and One Savings Bank have tried to make inroads into the market, but with limited success. Metro Bank has been the most successful, but its customer base of 360,000 pales in comparison with Barclays’ 16.7 million. As someone who lives in London, but sits on the board of an

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By Bhanu Choudhrie founder of C & C Alpha Group American challenger, Customers Bank, it has always surprised me that the UK market has been so resistant to change. Customers has enjoyed six years of stellar growth; back in 2009, it had assets of $250m; four years later, it was welcomed on to the NASDAQ stock market; today, it’s quoted on the New York Stock Exchange and has assets of $7.1bn. Why has the new generation of banks in the UK found it so difficult to replicate our journey and loosen the stranglehold of legacy institutions? How do they disrupt the market? Technology is the answer. At Customers, after ten months of testing we launched an entirely new brand this year, Bank Mobile, a virtual bank targeted at millenials. It takes just five minutes to open an account – you simply photograph your ID - there are no fees and the Bank Mobile app, powered by Malauzai software, contains a number of innovations designed to make customers’ lives easier. To pay a bill, you can just photograph it; you can turn your debit card on and off for security reasons, and when you make a direct deposit you get free access to our financial advisors. We have already created an app for the Apple Watch. We encourage our customers to drive innovation. “Build your own bank”, we call it. Our aim is to rewrite the banking business model by simplifying the mobile experience; we think of

Customers Bancorp, Inc team at NYSE on the day of being listed Asian Voice & Gujarat Samachar

FBI 2015  

Finance Banking Insurance 2015

FBI 2015  

Finance Banking Insurance 2015