Many of the new challenger banks and fintech companies boast that what differentiates them from the big incumbent lenders is that they are “customer obsessed”.
Their focus on providing a different kind of customer experience has led to snazzy digital and mobile interfaces, top-notch design, free giveaways and, in many cases, commission-free services for clients. But it is not yet clear whether this strategy will lead to profitability for the likes of Monzo and Revolut.
That’s because most banks are first and foremost in the business of lending, and only second in the business of helping people manage their money. Meanwhile, customers tend to see both services as utilities and use price as the primary comparison point. Additional bells and whistles may be appreciated, but customers won’t necessarily be prepared to pay more for them.