Legacy banks have their work cut out for them if they want to survive another century as key players in the digital banking world.
European challenger banks like Monzo and N26 are expanding to new markets and an increasing number of other financial players are launching suites of products and services designed to entice customers away from their traditional financial institutions (FIs). This is driving legacy banks to take a closer look at their own products and strategies, with many rising to the challenge.
In the latest Digital Banking Tracker, PYMNTS examines how legacy banks are approaching innovation among the rising tide of challenger banks and smaller FinTech startups, as well as how they’re approaching authentication and security as customers continue to demand more convenience and speed.
Around the Digital Banking World
Banks both new and old are looking to launch additional products aimed at keeping customers away from their competition.
British challenger bank Monzo is among those moving into new product segments following its recent launch into the United States, announcing a partnership with AXA partners to provide travel insurance to its users. This represents an effort by Monzo to differentiate itself among the crowd as it looks to expand its base.
Legacy banks are also searching for any competitive edge they can find, with banks like the Commonwealth Bank of Australia (CBA) completely redesigning its mobile app. The bank is making use of technologies like machine learning (ML) and advanced data analytics to ensure its updated app provides the most personalization and speed that it can to customers.
Digital banking is on the rise worldwide, with regions like Taiwan following Singapore’s lead and introducing digital banking licenses. Regulators just issued its first three of these licenses to various FIs in the region, which will contribute to the global spread of online banking.
For more on these stories, visit the Tracker’s News and Trends.
How Challenger Banks Are Giving Legacy Players Key Opportunities
Legacy banks are being tasked with approaching innovation in a new way as challenger banks increase their market share and their popularity with customers. Challengers are giving legacy institutions a necessary innovation push, however, as well as more opportunities to engage with customers, says Jamie Warder, head of digital banking for KeyBank. To learn more about how challenger banks are creating healthy competition, visit the Tracker’s feature story.
Deep Dive: How Legacy Banks In The U.S. Are Competing With Challenger FIs
Considering 76 percent of U.S. consumers would not even think about opening bank accounts with an FI that doesn’t offer mobile banking, legacy banks are working to shake off older infrastructures and embrace more modern technologies as to not get left behind. Legacy banks are also leaning hard on their brand presence both online and at branches as more FinTech startups and challenger banks enter the digital banking space and appeal to tech-savvy customers. To learn more about how legacy banks compete through mobile banking innovation and more, visit the Tracker’s Deep Dive.
About the Tracker
The Digital Banking Tracker, a Feedzai collaboration, brings you the latest news, research and expert commentary from the FinTech and consumer banking space. It also includes a provider directory featuring the rankings of more than 250 companies serving or powering the digital banking sector.