Europe is where private banking and banking secrecy was conceptualized. Traditionally, people have been very careful about who they give their money to and how it is invested.
As a result, some of the big, bluechip banks in the region — with a long history behind them and a bright future ahead — got the most customers.
Standard Chartered, Deutsche Bank, Barclays, BNP Paribas, and the likes have held their position in society and in the market for almost a century. However, over the past decade, things have changed significantly.
The financial crisis has forced customers to demand transparency from their bankers, and the new-age of technological disruptions has taught them to expect more bang for their buck.
Banks, the majority of who are still working on providing transparency and meeting customer expectations, are losing customers to new-age challenger banks such as Monzo, Revolut, and N26.
In fact, going by the numbers, it seems that the these new ‘banks’ are catching the fancy of young, well to do Europeans.
Take Monzo for example. The bank already has almost a million customers, of which 70 percent are less than 40 years old and earn more than GBP50,000 or US$65,000. That figure is nearly double the median British salary.
The company adds about 2,000 new customers every day and is valued at GBP100 million (US$130 million).
Revolut, another dominant player in the challenger banks space, has about 2.75 million customers across Europe and adds 7,000 new customers every day — all since its start in 2013.
Some of the top banks in this category, Monzo included, currently only offer limited services. However, they’re ambitious and hope to one day offer more a larger portfolio of more customized products to their customers soon.
In order to accelerate its growth, Monzo is developing a marketplace where customers can shop for financial services offered by other firms, earning the new-age bank a fee in exchange. Revolut, on the other hand, offers a handful of insurance and financial services products (including cryptocurrencies) and acts as an advisor or intermediary.
Obviously, as their portfolios expand, they’re subject to more scrutiny and more stringent regulations, but it’s all part and parcel of running a business in the financial services industry. It’s not something any of the new-age banks seem to mind.
Instead, Monzo, Revolut, N26, and many other new-age banks are quite hopeful for their future in Europe but are constantly looking to widen their horizons. As a result, they’re all looking to extend their services to customers in North America.
However, the fact remains that most of these new-age banks have found a firm foothold in Europe, building themselves a strong and loyal customer base. It seems as though customers have voted with their wallets and finally accepted these new-age banks.