Are dentists more attractive than banks?

By April 18, 2017Uncategorised
  • 71% of millennials would rather visit the dentist than their bank (me included)
  • 73% would be more interested in financial offerings from Google and Amazon than from high street banks
  • 33% believe that banks will be unnecessary within 5 years and are open to switching banks in the next 90 days (Scratch/ Viacom Media Networks, 2016)


So how can the banking sector engage this digitally savvy, disloyal and demanding audience?

Gone are the days when reps from the high street banks rocked up at Fresher’s Week and recruited their customers for life – the 4 UK leading banks are now among millennials’ 10 least-loved brands. These digital natives – cash and time-strapped but with high expectations – know what they want and a group of challenger banks are lined up in the race to win them over.

So what do they want and who’s winning?

  1. Ease of transaction and transparency – multiple passwords and not knowing if your payment to account number 007007, sort code 00-70-07 has actually reached James Bond are no-nos
  2. Real-time information – most banking updates are instant but contactless, albeit an excellent innovation, often doesn’t show up for a couple of days
  3. Personalisation – millennials love it
  4. Money management tools – to see where they’re spending their pennies and meet targets
  5. …and innovative and digital, preferably an app, The ‘Uber’ of banking

Since the relaxation of banking rules in 2012 and the launch of the Current Account Switching Service (2013), the Prudential Regulatory Authority and FCA have received 45 banking licence applications! Of these, four large digital challenger banks emerged – Monzo, Atom Bank, Starling Bank and Tandem. Combined they raised £332m through crowdfunding and VCs (Real Business, 2017). These players are still jostling for position – most are still in beta and vulnerable to setbacks. Let’s look at four…

  1. Monzo…the best for prepaid cards
  • This pioneering, mobile-only bank has grabbed millennial’s attention for more reasons than its snazzy, coral cardPicture1
  • Monzo has just been granted a full, unrestricted banking license by the regulators, having smashed a second crowdfunding record
  • Future plans include current accounts, one-click access to third-party financial prod
    ucts, retailer loyalty and discount schemes, price comparison sites, investments and even the possibility of switching utility provider or filing your tax return – all this as part of a move toward “banking as a marketplace”

What do we think?

  • Monzo has brought a buzz to the banking customer experience by energising it with personalisation – photographs of users, emojis and effective word-of-mouth marketing with ‘Willy Wonka-style’ golden ticket referrals
  • They have created a community which appeals to millennials and engages users in the company’s development. The website encourages suggestions (open innovation) and the transparent publishing of their product roadmap on the website increases trust in the brand 


  1. Starling Bank…the best for current accounts
  • Starling’s goal is simply to build “the world’s best current account”, no initial prepaid card. They call themselves a ‘tech startup with a banking licence’ and have partnered with TransferWise to provide cheaper international money transfers and Moneybox to give customers access to a suite of saving and investing tools
  • They offer real-time balance check (Starling Pulse) and notifications, overdraft facility with adjustable limits and biometric identification by Picture2video
  • They are the first UK licensed bank to launch a public PSD2-ready API, the first challenger bank to offer Faster Payments and organise hackathons to encourage open innovation

What do we think?

  • Of all the challenger banks, Starling is the  most mysterious and guarded about future plans,
    but we particularly like their idea of personalised current account numbers and their planned use of AI to offer a personal assistant service, suggesting an alternative coffee shop if you’re spending too much at Starbucks


  1. Atom Bank…the best for savingsPicture3
  • Atom Bank was one of the first challengers to launch, in April 2016 and so far have focused on savings and mortgages. Their USP is high savings rates (until March the best in the market) and low mortgage rates – their new29 % five-year fixed rate is by far the lowest ever seen (the next comparable deal is 1.74% from First Direct
  • They are ‘UX-ing’ banking with personalised colour-themes and logos and selfie and voice biometric log-ins
  • In future, Atom plans to use 3D animation and sound to engage its customers through its gaming platform Unity

What do we think?

  • While I fancy having my personalised ‘Amelia’s bank’, Atom’s current offering seems to target older millennials – younger, cash-strapped millennials will be less interested in a bank offering mortgages and savings products than a payment card or current account, which Atom will only be launching this year
  • The ‘What’s in Store’ page on their site engages potential users by informing them of future plans eg. current accounts, instant access savers and credit cards


  1. …the best for price comparisonsPicture4
  • Newbie Tandem suffered a set-back in March 2017, losing its banking license after funding from a Chinese conglomerate failed due to China’s overseas capital controls
  • While currently unable to offer full banking services,
    robo-based Tandem will for the moment provide a price comparison service. In the future they are hoping to be ‘corporate’s worst nightmare’ – giving customers actionable insights into where they can save by switching eg. energy supplier and then actually switching them

What do we think?

  • The fun, animated website gets our vote
  • The ‘co-founder’ community engages millennials by working in ‘tandem’ with customers to build a bank which reflects their needs (they also offer drinks parties)!
  • Tandem stands to increase healthy competition in industries way beyond banking


These are just 4 of a multitude of fintechs looking to revolutionise the world of banking for the next generation – check out also exciting Revolut, Loot and Curve. All challengers offer an enhanced customer experience and increased transparency which was lacking in the incumbent banks, but as yet all are lacking a full product offering. As such they are complementary rather than substitute products. If they want to win back millennials, high street banks should snap up these baby banks in their infancy and allow them to flourish and grow with an independent identity.