New Entrants: Mapping the Landscape

Table of Contents

1. EXECUTIVE SUMMARY 3

1.1. Market summary 3

1.2. Key findings 3

1.3. Critical success factors 3

2. THE CURRENT LANDSCAPE FOR NEW ENTRANTS 8

2.1. Consumers exhibit a preference for established providers 8

2.1.1. Current account switching in the UK is on the decline 8

2.1.2. Only a minority of consumers are receptive to fintech providers 10

2.1.3. Adoption of banking services provided by new entrants will be slow in the short term 11

2.2. Regulatory developments are opening up the market to challengers 12

2.2.1. PSD2 is set to open up the retail banking market in 2018 12

2.2.2. The CMA has mandated that UK banks provide access to customer data to third parties 13

2.2.3. The FCA has streamlined its procedures for authorizing new entrants 13

2.2.4. The FCA and PRA have partnered to create a New Bank Start-up Unit for the UK 13

2.2.5. Australia and Singapore have also introduced regulatory sandboxes 14

2.2.6. US regulators are trying to ease the authorization process for new banks 14

3. NEW ENTRANTS IN CLOSE-UP 17

3.1. The UK 18

3.1.1. Starling Bank is building a marketplace of third-party products 18

3.1.2. Monzo wants to equip users with detailed information on their spending 20

3.1.3. Atom Bank is gaining a reputation for highly competitive product pricing 23

3.1.4. Tandem will use data-driven insight to inform and advise its customers 26

3.1.5. Monese is successfully targeting the market for recent migrants 28

3.2. Germany 30

3.2.1. N26 is expanding its product range through third-party partnerships 30

3.3. France 33

3.3.1. Compte Nickel has won over underserved consumers with its low-cost account 33

3.4. The US 36

3.4.1. Bee focuses on providing low-cost banking services to lower-income consumers 36

4. RECOMMENDATIONS FOR NEW ENTRANTS 38

4.1. Employ a clear proposition 38

4.2. Target an underserved market 38

4.3. Allocate resources efficiently 38

4.4. Pay attention to profitability 39

5. APPENDIX 40

5.1. Abbreviations and acronyms 40

5.2. Bibliography 40

5.3. Further reading 43