The Rise of Challenger Banks

The rise of challenger banks like Revolut, Monzo and Starling Bank is disrupting the traditional banking industry as they use technology to gain market share. There are now over 250 challenger or neobanks globally, with the top 20 valued at more than $73 billion and having over 130 million customers. These fintechs are being propelled by a large influx of venture capital money. Challenger banks have become more attractive to customers due to their ease-of-use, no-fee accounts, early access to funds via banking apps, and the convenience of online banking during the pandemic. Traditional banks are trying to compete with new digital offerings, while non-bank companies like Amazon and Walmart also pose a threat by offering financial services to complement their core businesses. All these developments put pressure on legacy banks to innovate and expand their digital capabilities, as well as improve data access and transaction security.