We need banking that is unusual - Chris Skinner's blog (2024)

Over the week, I got an update about Revolut and their business model.It was quite interesting although a little bit macro-level. My favourite part is where the Business Model Analystlisted the competitors to Revolut:

• Monzo:Monzo is a UK-based digital bank that offers features similar to Revolut, including budgeting tools, international money transfers, and fee-free spending abroad. Monzo has a strong user base and has gained popularity for its user-friendly interface;
• N26:N26 is a German mobile bank that provides services similar to Revolut, including a digital wallet, multi-currency accounts, and overseas spending. N26 has a significant presence in Europe and has expanded its operations to the U.S.;
• Wise (formerly known as TransferWise):Wise is a UK-based fintech company that specializes in international money transfers and multi-currency accounts. While Revolut offers similar services, Wise has a strong reputation for its transparent and low-cost exchange rates, particularly for larger international transfers;
• PayPal:Although it is known for its online payment system,PayPalhas entered the digital banking space with offerings that directly compete with Revolut. It provides services like debit cards, money transfers, and currency conversion, making it a formidable competitor in the fintech industry;
• Traditional Banks:Revolut’s competitors also include traditional banks that have started to offer digital banking services. These banks leverage their well-established brand reputation, extensive customer base, and existing infrastructure to compete with Revolut in terms of financial services and international transactions;
• Paysera:Paysera is a Lithuanian-based fintech company that offers a range of financial services, including online payments, currency exchange, and financial management tools. Paysera competes with Revolut by providing competitive fees for international money transfers and convenient money management solutions;
• Chime:Chimeis a U.S.-based digital banking platform that offers a combination of traditional banking services, including spending accounts, savings accounts, and fee-free overdraft protection. It directly competes with Revolut in terms of providing a user-friendly banking experience and innovative features;
• Starling Bank:Starling Bank is a UK-based digital bank that operates exclusively through its mobile app. It offers services like current accounts, debit cards, and money management tools, catering to individuals and businesses alike. Starling Bank is a strong competitor to Revolut, especially in the UK market;
• Ally Bank:Ally Bank is a U.S.-based online banking institution that provides services such as checking accounts, savings accounts, and investment options. While it may not offer the same range of international services as Revolut, Ally Bank competes by providing competitive interest rates and a seamless digital experience.

Interesting list, as it doesn’t include the traditional FX firms like Travelex (yes guys, they’re still around!). Maybe they missed some of these more traditional exchanges because the whole thing was written by AI? Well, that was the accusation one friend made on X:

Sounds like this article was heavily written AI

See Also

Banking Subscription Management | FinTech Insights

— Ace (@jrg005) January 14, 2024

That comment made me think for a minute about AI, and so I asked ChatGPT What is the future of fintech? An interesting response: I can provide some general trends and considerations that were relevant up to that point, and these may continue to shape the future of fintech:

1. Digital Transformation: Fintech companies will likely continue to leverage advancements in technology to enhance financial services. This includes the use of artificial intelligence, machine learning, blockchain, and data analytics to improve efficiency and offer innovative solutions.
2. Open Banking: Open banking initiatives, where financial institutions share customer data with third-party developers securely, have been gaining momentum. This trend is expected to continue, fostering collaboration and innovation in the financial services sector.
3. Cryptocurrencies and Blockchain: The adoption of cryptocurrencies and blockchain technology in financial services has been a significant trend. This may continue as the regulatory environment evolves and as more traditional financial institutions explore blockchain applications.
4. Regulatory Developments: Regulatory changes can have a profound impact on the fintech industry. Governments around the world are working to establish frameworks to manage the risks and benefits of emerging technologies in finance.
5. Financial Inclusion: Fintech has the potential to improve financial inclusion by providing services to individuals and businesses that may have limited access to traditional banking. This could involve the use of mobile payments, digital wallets, and other innovative solutions.
6. Cybersecurity and Data Privacy: As fintech companies handle sensitive financial information, there will be an ongoing emphasis on enhancing cybersecurity measures and ensuring robust data privacy practices.
7. Neobanks and Challenger Banks: The rise of neobanks and challenger banks, which are digital-only banks without physical branches, is likely to continue. These entities often focus on user-friendly interfaces, lower fees, and quicker access to financial services.
8. Evolving Payment Systems: Advances in payment technology, including contactless payments, mobile wallets, and real-time payments, are expected to shape the future of payment systems.
9. AI-Powered Personalization: Fintech companies may increasingly use artificial intelligence to offer more personalized and targeted financial products and services based on individual customer behaviour and preferences.

I’m guessing that ChatGPT has been using a lot of reports around the industry of the future outlook, two of which slapped me in the face in the past week. One is from SAS, who surveyed the banking industry to see how they saw the future. Their key findings:

• Bank leaders display cautious optimism about the future. They are generally positive about how some major trends— including digitalisation, digital currencies and the increasing importance of environmental, social and governance (ESG) issues—will impact their own organisation in the coming decade. At the same time, they remain conscious of growing risks from cyber-attacks and geopolitical uncertainty, among others.
• Despite the optimism, various obstacles could prevent banks from staying competitive amidst these major trends as well as leveraging the power of data analytics. Challenges include siloed functions and departments, lack of relevant data to inform decision making and customer concerns around the use of their data.
• Digital transformation tops bank leaders’ mid-term strategic priorities. The majority (77%) believe that their organisation is on track or ahead in meeting its digital transformation initiatives and goals.
• Purpose-driven banking represents an historic shift away from the longstanding shareholder governance model—and it is viewed positively by most executives. About three-quarter of respondents (76%) believe that their sector is obligated to address societal issues.
• Translating such high-level support for purpose-driven banking into real action requires greater commitment and effort. Three out of five executives (64%) say that the financial services industry lags behind other industries in terms of progress on ESG goals and commitments, and only 38% say that their organisation has already established transparent and measurable ESG goals aligned with their corporate strategy.

Interesting. This is slightly different to the findings of Cognizant who, with AWS, produced another report about banking in the shorter-term, 2030, and their report,Banking in 2035: how emerging technologies will transform the way we bank,provides an idea of how financial institutions can use techie innovations to create a “hyper-personalized, seamless customer experience”. Duh?!

The key takeaway? Being “digital-first” is no longer enough. To compete in the future, banks must become “technology-infused,” reimagining every aspect of their business through an emerging tech lens.

They then cite five technology trends that will shape the future of financial services:

• Quantum computing;
• AI;
• DeFi and crypto;
• Embedded; and
• Biometrics

No surprises there, as that’s what I deep dive into in my next new book, Intelligent Money (coming out in the Spring). Anyways, and either ways, all of the above shows that banking as usual is banking that’s dead. We need banking that is unusual.