8 challenger brands in finance

“People switch on average every 26 years. You’re more likely to be divorced than to change your bank account.” – Ed Balls, Andrew Marr Show, 8 July 2012

Loyalty like that in any other industry is frankly unheard of. It’s the infamous holy grail, it is also the reason why banks, for many years, thought it was ok to rely on antiquated systems, offer poor services, ignore existing clients and focus all their energy on new acquisitions and generally just piss us all off. To continue the marriage analogy, it’s like kissing prince charming but ending up married to the toad.

The institutions considered themselves safe as houses, but the world of finance is changing, since the financial crisis it is fast becoming one of the most progressive industries – full of entrepreneurial challenger brands posing a credible challenge to the big institutions. In the next two years alone up to 9 new banks are expected to hit the stock market which will triple the number of listed banks in the UK. A lesson for anyone that considers themselves to be in a secure industry – no industry is too complicated, or too investment heavy, to stop a challenger brand with a mission from stepping out of the fringes and taking you on!

So who are our top 8 Challenger Brands making an impact in the financial category? What are they challenging and what can we learn from them?

Number One. Bitcoin.

Always start with the obvious. Bitcoin is a virtual currency that is open source, secure, private and has totally decentralized book-keeping. As npr noted, Bitcoin “ is the stuff of a Dan Brown novel.” People can’t help but talk about this decentralized digital currency. It’s challenging the fundamentals of money and democracy AND It was started by Satoshi Nakamoto – a man who is a huge mystery and hasn’t been known to answer an email since 2011.

Core thought:

We live in a global economy, the world needs a global currency.

What are they challenging:

Blind-bureaucracy – the belief that single organizations have the mass’s best interests at heart.

What can the rest of us learn from Bitcoin:

Mission can be just as valuable as masters. A huge misconception about challenger brands is that they need visionary leaders. They don’t, they just need vision.

Number Two. Transfer Wise

Transfer Wise is a money transfer site fighting against what they describe as the scandal of today’s overseas money transfer system. They have positioned themselves as the ultimate peoples champion, on the side of the consumer, fighting to keep your money out of ‘the claws’ of the bankers. I am in love with their bolshy campaigns and find their real-time transfer map on their website a great example of making the invisible visible (a weirdly compelling to watch).

Core thought:

People against banking BS

What are they challenging:

The motives of the finance sector

What can the rest of us earn from Transfer Wise:

Transfer Wise flipped the conventional language and tone of the industry, to be deliberately feisty and human in the face of banker’s inhuman jargon. It helped them find fame on a tiny budget. In many a challenger workshop we as people need to consider what are the key conventions of their category and how would you flip them. What would be on your list?

Number Three: Simple (Bank)

Everyone in the eatbigfish office will role their eyes as they read this. I have used Simple in almost every presentation I have given in the last two years. They are, in my mind, THE next generation challenger to the world of personal finance and savings accounts. Simple offer [simple] beautiful design focused banking experience and adamantly refuse to use any outdated or outmoded operating systems.

Core Thought:

New world banking with wow.

What are they challenging:

Prehistoric banking – the slow, tedious, sucky world of manual banking.

What can the rest of us learn from Simple:

At Simple they believe “banking sucks… what would it be like if it was awesome?” Simple aim to put awesome everywhere in their service, from the letters they send out to the little details within their app. If you were to draw out your customer journey and think ‘what sucks and where can I add wow?’ what would you do differently?

Number Four: Moven

Moven is a totally digital current account who have inserted a totally new emotion into the finance category – wellbeing. Like Simple, they are based around a simple well designed app with the look and feel of Help Remedies or maybe even Nike, definitely not a bank.

They are the only financial institution I have ever heard of that has oaths:

Oath 1.Do No Harm – Your financial health always comes first. While other companies profit off your mistakes, we will only be rewarded when you do well. Our intentions and fees will always be clear and transparent.

Oath 2. Prevention Before Cure – You should always have the information you need to make smarter decisions. Money is about managing choices, surprises, and unexpected events. We will always do our best to help you be prepared.

Oath 3. Care for the Community – It’s not about having more, but about living better. Being financially healthy means giving more to family, friends, and our community. Confidence is contagious and we want to inspire positive change for all.

Core Thought:

Wellness is better than richness

What are they Challenging:

The numerical nature of the financial industry

What can the rest of us learn from Moven:

Moven was originally called Moven Bank. They ditched the word Bank because they wanted to be in the business of wellness, not the business of banking. It meant they were then unleashed from the category conventions of the banking industry and instead used those of the wellbeing category. What industry could you be in if you just got rid of the baggage of the one you think you are working in today? What conventions of that category could you overlay on your own?

Number Five: Metro Bank

Metro Bank are to be the poster child of the the Challenger Bank movement in the UK. This feisty underdog was the first to be granted a high-street bank license in 100 years. Much like Umpqua, they have a service driven, rather than product driven culture. They even have doggie bowls for their four legged visitors.

Core Thought:

User friendly banks

What are they Challenging: 

The big bad banks

What can the rest of us learn from Metro Bank:

Metro Bank’s strategy? To “surprise and delight every customer” and “eliminate stupid bank rules.” Like all good challengers, Metro Bank are as proud about what they don’t do, as what they do, they know the importance of sacrifice and overcommit. Metro Bank sacrificed their advertising budget to overcommit to PR and service. What could you sacrifice so that you could better commit to your vision?

Number Six: M-Pesa

Did you know Kenya is leadingthe way in mobile money? While you may have just activated your Paym, over 70% of households in Kenya and more importantly over 50% of the poor, unbanked and rural populations are already using an SMS banking service. The company is M-Pesa. In Kenya, far more people have mobiles than they do bank accounts, so necessity being the mother of invention, mobile phone companies Vodafone and Kenya’s Safaricom, started this SMS money transfer service. In case you were wondering, the M stands for mobile, and Pesa is Swahili for money.

Core thought:

Democratising banking

What are they Challenging:

The thought that banking is only for the wealthy

What can the rest of us learn from M-Pesa:

M-Pesa is athe brain child of a mobile phone company. They reviewed their assets and looked outside for the opportunities that would suit those assets. Most of the time we considered innovation to be within our category, new flavor variants, new shapes and sizes. What if you sat down for an afternoon and listed out your assets, where else might they be useful?

Number Seven: Frank by OCBC

When banks create special service for customers, most of the time they’re targeting the wealthy, the mainstream, those who want mortgages, insurance an investment portfolio.  OCBC bank in Singapore realized that those most underserved are the young – they are poor, often in debt, and on the surface quite an unattractive prospect, so are overlooked by the industry.  They are however, the group most likely to open an account, so a whole new brand was born – Frank the straight talking bank for young adults (18-30 year olds).

Frank offers services, products and branches tailored specifically for this target group. For instance, their bank cards are completely customizable (which you can do though Facebook or Pinterest), their branches are more like a super-cool music store than a dusty old financial building and all their financial advice is clear, friendly and witty.

Core thought:

Helping young people grow

What are they challenging:

Banking is only for grown ups

What can we learn from Frank:

Frank challenged the conventional wisdom around the target market of the banking category and overcommitted to a small under-served segment. It lead to a flurry of innovations and a powerful recruiting brand. Who is underserved in your category today? How could you overcommit to targeting them?

Number Eight: First National Bank

Dubbed the worlds most innovative bank (2012 BAI — Finacle Global Banking Innovation Awards) First National Bank  (South Africa’s oldest bank) use their constraints of their market to innovate and become not just a credible maverick in its category, but a true leader in technological innovation.

We interviewed  Micheal Jordaan, former CEO of FNB while researching our new book A Beautiful Constraint (coming Jan 2015).  You can watch some highlights from our interview here.

Core Thought:

Democratising banking through innovation

What are they Challenging:

Elitist and antiquated banking in South African

What can we learn from FNB:

FNB is a great story of cultural revolution within a well established company. To create the innovative culture they needed they incentivised the innovative spirit of their employees at all levels – financially rewarding actions, not just ideas, that would help democratise banking for the South African people.