Disruptors begin sounding off 10 years on from financial crisis

By Ryan Weeks on Wednesday 9 August 2017

Alternative LendingDigital Banking

Fidor Bank VP says that consumers now have a “much more level playing field” when it comes to banking.

Fidor Bank VP says that consumers now have a “much more level playing field” when it comes to banking.

The 10 year anniversary of the global financial crisis looms, and fintech chutzpah has never been higher. The exact date of the occasion is the subject of some debate, but broadly it falls between the collapses of a Bear Stearns hedge fund and Lehman Brothers.

Fidor Bank is a challenger bank that was founded during the disarray that followed these events. Set up in Germany in 2009, the firm later launched in the UK in 2015. It is one of a large number of challenger banks that have emerged in the wake of the credit crunch. The more youthful of these challengers – such as Monzo and Revolut – have spurned the branch-banking model altogether, opting instead to focus on mobile usage.

Sophie Guibaud, VP of European expansion at Fidor, says that today’s banking market offers a great deal more choice to consumers than what was available 10 years ago.

“As consumers have become increasingly sceptical of traditional banks, one positive to emerge from the financial crisis has been the rise in prominence of challenger banks and innovative financial service providers,” she said. “For example, Fidor Bank was founded in the turmoil of the credit crunch, with the goal of creating a transparent, financially integrated experience for consumers globally.”

“Consumers now have a much more level playing field when it comes to banking, but most importantly too, they know it. This means that financial organisations can’t take their customers for granted again. In order to be successful in today’s world of banking, they instead have to have a customer-centric, transparent and fair service on offer.”

"Fintech" and "challenger" were terms scarcely heard of 10 years ago; today they are difficult to escape. But of course the rise of technology-savvy challengers in more or less every field of financial services has applied pressure to incumbent banks – and they are busily remodelling.

Increasingly banks are licensing the technology platforms of alternative lenders and software-as-a-service providers in an attempt to refine their online offerings. In the past week alone we’ve seen alternative lender OnDeck expand its partnership with JPMorgan Chase, while digital banking technology vendor Temenos announced a deal with Arab Bank Al Masraf.

“The capital markets industry has radically reshaped itself since the crisis began 10 years ago,” said Christian Edelmann, global head of corporate & institutional banking and wealth & asset management at Oliver Wyman. “Banks have enhanced their risk management, met new regulatory requirements and cut costs to restore profitability. The next 10 years will see similarly radical changes. The winning banks will be those that embrace technological change and proactively transform their workforce."

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