It may not be possible for traditional high street banks to catch up with the best digital challenger banks, according to the CEO of Tide .
The last few years has seen the launch of a number of mobile and online banks, which provide fast and innovative service to customers.
These have been designed to challenge the more traditional banks and target a younger audience who prefer to access their banking online or through apps.
As a result, a number of high street banks have begun to react and put more of an emphasis on developing and improving their digital service.
Barclays, for example, has opened a fintech co-working space, which will see it co-create new products, services and platforms.
However, George Bevis, founder and CEO of Tide – which offers an online business account service – believes it is not possible for traditional banks to catch up with their challenger rivals.
“Given enough time, banks probably could copy the features of Tide, Monzo and so on – but it would take them years.
“In the meantime, we will have developed many additional features that they don't have.
“Although bank challengers are still in their infancy, and still have relatively low market awareness, they are already beginning to represent a significant percentage of all new customer sign-ups.”
Alex Letts, founder and chief unbanking officer of U, agreed with George and felt despite the original promise of technology for the banks, it had now enslaved them.
“Their legacy stacks make them about as manoeuvrable as oil tankers.
“There is very little real prospect of them participating meaningfully in the digital re-mapping of the industry, even if they wanted to.”
However, Joel Perlman, co-founder of OakNorth, thought many high street banks would be able to catch up and even surpass their digital bank rivals when it came to certain technologies.
“With apps, for example, all banks now offer biometric identification as part of the security checks, and many customers can engage in live chats with their bank.
“Other features, such as real-time notifications and the ability to track spending, may not be mainstream yet, but are additions that the large banks could easily make, especially as they have the resources to invest heavily in innovation, development and deployment.”
NatWest and RBS, for example, plan to roll out 45-minute automated commercial real estate lending decisions as it looks to speed up the application process for customers.
Joel felt that the key challenge for the major banks was that their legacy IT infrastructure prevented them from adapting to meet new customer demands as quickly as their digital rivals.
“As a bank that's fully hosted on the cloud, we are able to bring new products and services to market in a fraction of the time that it takes our larger rivals.
“This is an advantage that will be much harder for the large banks to replicate as a migration of that scale would take them years and cost hundreds of millions of pounds.”
Meanwhile, George added: “Not only are we better at building features that customers want, we're also faster at account set up and better at marketing.
“Big banks' wasteful organisational cultures make it almost impossible for them to compete.”
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Metro Bank to open first store in Liverpool
Metro Bank is set to open a new store in Liverpool on Paradise Street...
Investec removes SVR from all new fixed rate mortgages
Investec Private Bank has removed the standard variable rate (SVR) on its two-, three-, four-, five- and 10-year fixed rate product range for all new clients...
Mid-size automotive manufacturers miss out on £25bn in revenues
UK mid-sized automotive manufacturers could be missing out on £25bn in revenues as a result of insufficient access to funding, according to research from Wyelands Bank...
Leek United hires new finance director
Leek United Building Society has named Rob Broadbent (pictured above) as its new finance director...
Handelsbanken posts 7% lending surge
Handelsbanken has revealed in its latest quarterly results that its UK lending increased by 7% to £21.1bn in Q1 2019 compared with the same period last year...
Al Rayan Bank expands Birmingham headquarters
Al Rayan Bank has expanded its operational headquarters in Edgbaston, Birmingham...
Cynergy Bank bolsters senior leadership team
Cynergy Bank has strengthened its senior leadership team with two new appointments...
Dispelling overseas property investment myths
When people talk about overseas buyers ‘snapping up’ UK property, assumptions about their supposed negative impact on the housing market abound...
Arbuthnot Latham appoints private banker to Manchester office
Arbuthnot Latham has announced the appointment of Barry Grieve as senior private banker to its Manchester office...
United Trust Bank launches exclusive broker promotion
United Trust Bank (UTB) has launched its 2019 ‘Live and Learn’ broker promotion...
Triodos supports extension of Bristol music venue
Triodos Bank has part-funded the £6.3m extension at the music venue St George’s Bristol...