#069 - Why Challenger Banks are scaring the Big 4 High Street Banks

Ever struggled with High Street Banks? We have!! And the new kids on the block are after our business as a result. Challenger Banks are shaking up the status quo.  Have you got one of the new banking apps? What do you think? Will the Big 4 struggle in the future? Is it purely down to tech or is customer service (or lack of it) what will make you choose your next bank? Would you like to hear one of the bank bosses on the podcast? If you know one of them tell us and we will see if it can be arranged! Subscribe, review and get in touch with us! [email protected] on email @nigeltbest on Instagram The description below is courtesy of good old Wikipedia 😊 Challenger banks are small, recently-created retail banks in the United Kingdom that compete directly with the longer-established banks in the country, sometimes by specialising in areas underserved by the "big four" banks (Barclays, HSBC, Lloyds Banking Group, and Royal Bank of Scotland Group). As well as new entrants to the market, some challenger banks were created following divestment from larger banking groups (TSB Bank from Lloyds Banking Group) or wind-down of a failed large bank (Virgin Money from Northern Rock). The banks distinguish themselves from the historic banks by modern financial technology practices, such as online-only operations, that avoid the costs and complexities of traditional banking. In order to be defined as a "bank", the company must be authorised to accept retail deposits by the UK financial regulator the Prudential Regulation Authority (PRA) Prior to changes in the regulatory landscape in the UK financial services industry, setting up a new bank, with a full UK banking licence, was extremely expensive and time consuming. This led to a very small number of banks dominating the UK market - the so-called Big Four - with virtually no competition at all. Indeed, when Metro Bank received their license in 2010, it was the first one to have been issued by the UK government in 100 years. Example Challenger Banks Aldermore 2009 Atom Bank 2016 Metro Bank 2010 Monzo 2015 N26 2016 OakNorth 2015 Shawbrook Bank 2011 Starling Bank 2014 Tandem Bank 2015