Stephen Lemon, co-founder and VP corporate development at Currencycloud

Challenger banks have a clear edge over incumbents in the area of customer experience, a senior executive in the payment platform sector has claimed.
“Neobanks have the advantage over the established players here because they’ve been built from a customer-first perspective,” said Stephen Lemon, co-founder and VP corporate development at Currencycloud. “Bigger banks have to be profitable, and that can come at a cost to their customer experience. If the challengers had the scale of the big banks right now – you could put forward an argument that some high street banks would no longer exist.”
Newer banks, he said, have yet to reach anything like incumbent scale, and have a long way to go: “This is their greatest challenge – as well as being the banks’ current saving grace,” he claimed. “To keep growing they need to maintain their edge over their competition, which not only includes the established banks, but fellow neobanks as well. This means they have to collaborate with tech partners that can unlock and launch these new services. The growing fintech arms race means that all banks need to keep arming themselves with the best tech solutions out there.”
Cloud, said Lemon, is key: “A lot of these banks favour cloud-based solutions because of their flexibility, none more so than challenger banks, which can integrate APIs – such as Currencycloud’s – quickly and effectively into their operations, which ultimately improve the services they offer,” he concluded. “Adopting a cloud based solution will eradicate headaches from businesses when it comes to regulation or infrastructure, meaning newer banks, which are still scaling, can put their attentions elsewhere. The technology scales with them too, and can be adapted to enter new markets. While the incumbent powers are also adopting more cloud-based solutions, their infrastructure means that this process can take a long time. Neobanks are more agile – and it is this agility that will set them apart from the established powers, it means they can scale quicker, and scale effectively, providing a perfect platform for them to challenge the established banks further.”

by Guy Matthews