The current state of challenger bank research. Is consolidation the only future?
In the last five years, a flurry of challenger banks have emerged thanks to changing customer behaviour and a lack of visible investment in customer experience from traditional banks. They had clear value propositions targeting millennials and the techfriendly populations. While they did manage to bring in a lot of early adopters as customers; sustainable growth, profitability, and catering to an ever-changing population remains a different question. For all the advantages challenger banks have - lack of legacy tech, low operational costs, and great customer experience - banks still have one massive edge: a large group of fairly loyal customers. Is it time for challengers to forget challenging and start collaborating?