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The Future Of Banking
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REPORT
Key Takeaways:
? Trust in banks remains high (79%) when it comes to investing money, handling finances and keeping data safe. However, 30% (rising to 37% for those 18-34) are still considering changing banks in the next 12 months, lured by better rates and rewards elsewhere.
? Usage of bank branches remains high, with 86% visiting in the past year, mainly for deposits and cash access. This is despite respondents’ awareness that most services are available digitally, revealing a lingering discomfort with moving to fully digital or remote banking.
? Instant payments (78%) and digital access to a banker or concierge (64%) are deemed the most important services banks can offer over the next three years, with respondents showing an appetite for more financial advice and money management support from banks.
? Uptake of AI banking tools remains low (21%), but satisfaction is high among those who have used these tools (96%). However, 57% would not feel comfortable acting on AI financial recommendations, with discomfort being the highest among older demographics.
? Three quarters of consumers (74%) use an average of two to three financial providers in addition to their primary bank, especially for credit cards, savings and checking or withdrawals, with 25% using third-party money management apps.
However, some digital banks have made notable efforts to reduce cash burn and expand into higher-margin product lines such as lending, resulting in some neobanks achieving profitability In 2023. Profitable digital banks include Nubank, Upgrade, Monzo, Starling, bunq, and Tandem Bank. However, this is not the case for all neobanks, with SoFi, Dave, MoneyLion, Chime, and Varo still working to close the gap toward profitability and some digital banks like HMBradley winding down their consumer-facing operations.
?? NEWS HIGHLIGHT
TerraPay, a leading global cross-border payments network company, and Diamond Trust Bank Uganda (DTBU), a prominent member of the Diamond Trust Bank Group, today, announced a strategic partnership to expand international money transfers and strengthen financial inclusion in Uganda. Together, both firms will deliver unparalleled benefits to customers worldwide.
The key attributes of this partnership include the ability to facilitate direct account deposits from any part of the world and leverage DTB’s renowned brand name to optimize advantages for customers across the globe.
?? ARTICLE
NOW, ON TO THE SUMMARY OF LAST WEEK'S?NEWS
?? DIGITAL BANKING HIGHLIGHTS
?? Molo introduces Expat buy-to-let mortgages .
?? British SMEs lost ￡2.8 billion in 2023 to "rip off" bank FX fees says Wise.
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?? Revolut launches Robo-Advisor in EEA to automate investing .
?? REGIONAL HIGHLIGHTS
UK ????
Revolut targets CFOs with new AI-driven product ‘Billpay’, which will allow businesses to automatically pull in invoices from their accounting platforms, extract the necessary information.
Monzo targets ￡4bn valuation in fresh funding round. The UK fintech could finalise a deal as soon as the next two weeks to raise as much as ￡350mn from a mix of new and existing investors.
Griffin Launches Foundations, An Early Access Programme For UK Companies To Embed Banking Products. This comes after a successful pilot programme for its first set of customers .
EUROPE ????
Solaris Bank Ends Months of Trepidation with ADAC Deal. The deal is financially important for both companies, not only for Solaris bank. It also marks a turning point in the banking fintech’s strategy .
Finnish digital neobank Saldo Bank opens in Sweden . The bank will start operating in Sweden in February and offers interest rates of up to 5% on one year’s fixed-term accounts.
European Central Bank posts first annual loss in two decades. It reported losses of 1.3 billion euros ($1.4 billion), which would have been steeper, had the bank not released 6.6 billion euros its entire provision for financial risks .
USA ????
Federal financial regulators are exploring allegations by two whistleblowers that Cash App , the popular mobile payment platform, and entities providing transaction services to its users performed inadequate due diligence on customers.
Capital One Financial Corp. agreed to buy Discover Financial Services in a $35 billion all-stock deal to create the largest US credit-card company by loan volume, giving the combined entity a stronger foothold to compete with Wall Street’s behemoths.
Green Dot forms BaaS partnership with Dayforce. Through this partnership, Green Dot will serve as the U.S. banking provider for Dayforce Wallet, the HCM company's on-demand pay solution.
LATAM
Mexican neobank Hey Banco's split from Banregio due for 2025. Hey Banco’s endeavour to operate as a standalone entity gained further traction in July 2023, when it landed a banking licence with the National Banking and Securities Commission .
Nubank launches IPCA CDB as new investment option. With this addition, customers will have another fixed-rate investment option to diversify their portfolio .
Neobanco Ualá announces increase in the rate of return on its account in Colombia. According to Natalia Ríos, this initiative arises in response to the demands of users and the macroeconomic particularities of the country.
Brazilian Neobanco Will Bank is majority-owned by Master Bank. The transaction will enable Master to serve 10.5 million retail customers and will seek to expand this number through the products.
ASIA
Revolut says it’s gross profitable in Singapore for 2nd year running. This makes the company gross profitable in the city-state for the second year running.
Tonik introduces joint savings for couples: The 'Luv Stash'. There is more to love as Tonik Bank also offers the Group Stash allowing groups of 3 or more to pool resources and work towards achieving their collective SquadGoals .
UNO Digital Bank secures $32.1 million in funding to fuel expansion. The funding and support from various partners reflect a collective confidence in the UNO Digital Bank approach to future proofing banking services in the Philippines.
Nine years after its launch, Jan Dhan still going strong; 31.5 million accounts added in FY24 so far. The main features of the scheme include one basic savings bank deposit (BSBD) account for every unbanked adult, an overdraft (OD) limit of Rs 10,000 .
MOVERS AND SHAKERS
After leading the first bank to list on the ASX in 30 years, Judo co-founder Healy to resign. Joseph Healy, will step aside on 18 March to make way for another co-founder deputy CEO and chief relationship officer Chris Bayliss to lead the company.
Metro Bank appoints Andy Veares as Managing Director for Corporate and Commercial. With over 30 years business and commercial banking experience, Andy’s new role sees him take responsibility for the bank’s corporate and SME customers .
Toss Bank taps ex-DGB CFO as new CEO. The bank’s CEO recommendation committee picked Rhee Eun-mi as the sole candidate for the next top leadership position in recognition of her deep understanding of the banking industry .
Cyrille Salle de Chou joined Starling Bank as its chief risk officer (CRO). He spent the last seven years at HSBC in multiple chief risk officer roles ; first he was CRO for the European retail bank and wealth management divisions, but spent the bulk of his tenure as CRO of wealth and personal banking for HSBC UK.