Today, I am on a panel at the Retail Banking: London 2015 Conference with two other founders in the financial services category. As an executive who has spent over 30 years in some of the biggest financial institutions in the world, I am more comfortable with the title CEO than founder.

To me, personally, founder conjures images of the original patriarch of a shipping empire or some such, more than a professional executive leading an organisation. In a start-up world, however, the title founder has gained almost a mystical significance. Literally thousands of hopefuls driving hard to become the next Mark Zuckerberg.

Today, I am honoured to sit on the conference stage along two very successful founders, Anthony Thompson founder & chairman of Atom and, previously Metro Bank and Alex Letts, CEO of Ffrees.

As I was preparing for the panel, and thinking about my esteemed peers, and their respective businesses, it brought to mind lots of questions we at Starling have asked, and are still asking, ourselves about where the UK banking market is headed and how we carve out a clear, distinctive proposition that will drive greater levels of switching. Timely that today the CMA released the next stage issues statement report in their “Retail Banking Market Investigation”.

I often get asked how many new entrants can the market sustain? If you have the crystal ball that gets you to this answer, then well done! I firmly believe that mystical number is dependent on how you define “the market”, and as a result has a multitude of permutations.

Is our market “full-fat” retail banking?

If so, is that defined by having a banking licence? How do we ensure that the term “bank” continues to have meaning for the generations that will grow up in an increasingly disaggregated world?

At Starling, we’ve come down firmly on the side that the banking licence matters. Beyond the trust garnered from regulatory supervision & the underwriting of balances, it is still the frame of reference for how the bulk of the population see their first port of call for a place to keep or get their money.

But does full-fat also have to mean you deliver 31 flavours?

Multi-product, mono-line? Multi-channel, bricks & clicks, or just plain clicks?

Why do customers have multiple products that do slightly different shades of the same thing? The mental accounting piece aside (because that can be solved in other ways), it’s because banks have spent years telling customers they need them. And why? Because selling (and it was selling) complex products, with opaque charging models made really good commercial sense!

As for channel, I think that is still a matter of customer preference. Data shows that branches are still important for large segments of customers, but likewise, whole swathes haven’t set foot in a branch for years.

Ultimately for us, it comes back to focus. If you can do one product and one channel well, to the benefit of your target customer group, in a way that still makes you money, then why wouldn’t you?

So what about the splinter factions?

If focus is the key to great customer experience, and therefore strong commercial performance, then maybe a fully disaggregated model is the way to go. Certainly when you look at where best in class customer standards are now being set, it isn’t by any existing bank, but these smaller players striving for excellence in delivering one piece of the puzzle.

But this brings us back to where we started on the changing face of our category – is a pre-paid cash card the same as a current account if it lets you do all the same things? Is the fact you can label yourself as “not a bank” still likely to benefit customer perception for some time yet?

If we frame customer need in the origins of the term banking – a place to safely house your money, pay for things, borrow if you need, and ultimately make more of what you have in order to facilitate a better life, then will the majority of customers be happy having to liaise with multiple types of providers or different brands? Many would understandably say yes, but is the danger in this model that we again allow for lack of transparency to creep in?

All I can say, is that there has never been a more exciting, yet challenging time for our category. These questions won’t go away, and I believe it will be the likes of the three of us on stage today, and a whole host of other founders that will emerge over the coming 5-10 years that will create a fundamental step-change in this category, changing its shape forever.

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