NatWest recently revealed the launch of a pilot programme which will allow customers to bank using just their voice.
The bank claimed that it could mark the beginning of a major change to how customers manage their finances and said that this was just one of a number of services it was developing this year to better serve its customers.
With major banks innovating with new technology, Specialist Banking set out to discover what specialist banks had planned next to further revolutionise the sector.
Mortgages with updated credit scoring
Tandem Bank is currently working on a mortgage product that it claims could be a “gamechanger” in the industry.
It plans to offer competitive mortgages that will offer a fresh approach to identifying trustworthy borrowers, with a new method of credit scoring that allows for a fuller picture of how each applicant spends, saves and borrows.
“This new innovation is needed because the mortgage industry in its current state is only serving a very specific group,” said Sven Schindele, banking products director at Tandem.
“The way people work, live and spend is changing and we need a mortgage offer that changes with its customer.
“While the credit bureau structure works for some, the hard pass or fail format of checks based on only a few touchpoints doesn’t take into account someone’s full financial situation.
“New digital banks have access to a wealth of financial data which could transform the mortgage application process, offering a solution for those currently underserved by the incumbents.”
Chetwood Financial focuses on using customer data to make dynamic lending products and is looking to use real-time data to improve the way it serves its customers.
Its LiveLend Reward Loan monitors a customer’s credit score and reduces its rate at three-month intervals as the risk of the loan improves.
The bank believes there are many ways in which products can be more dynamic in the future.
Julia McColl, commercial director at Chetwood Financial, said: “We develop products that allow customers to get a quote with no impact on their credit score and encourage them to shop around for the best offer.
“We're looking to do something different with our products, by tailoring our services to meet the needs of those using them.
“By building unique, dynamic products that adjust to our customers and their needs we hope to make engaging with personal finances easier than ever before.”
Financial literacy for children
Revolut is planning to launch Revolut Youth in a few months’ time, a service aimed at improving the financial literacy of children and teenagers.
Customers will be able to add their children to their account as a secondary user.
Children will be able to choose their own card and start using Revolut’s current account and money management platform through the app, while teenagers will have access to another version of the feature.
George Robson, product owner for premium at Revolut, said: “We believe that taking control over your finances is a lifetime of work and starting to learn about financial literacy and how to manage your money is vital from a young age.
“The long-term goal is focused on promoting financial literacy and allowing children to earn the trust to have more financial freedom.
“We are also aiming for the app to meet the United Nation’s development standards for financial literacy.”
Back to basics
Jonathan Thompson, founder and CEO at B-North, mentioned that it was planning to innovate in 2020 by bringing real, skilled SME lending bankers to the front line of its business.
“In the world of SME, innovation to date has all centred around the mass market, the small S of SME.
“True innovation in banking has bypassed those larger, more established businesses, particularly those with more complex needs, who simply look difficult to serve when the majority of innovation centres around online or app-based, mass-market models.
“These larger businesses need bespoke — so that is where we are innovating.
“We’re targeting the difficult bit of SME, the bit that doesn’t easily fit into algorithms and industrial processes and focusing on delivering genuine, impactful innovation into that segment.
“To date, the big banks and early-stage challengers have had it all their own way in this space … that has to change.”
Amir Nooriala, chief strategy officer at OakNorth, said that it was innovating through partnering with non-lending fintechs.
The bank has teamed up with financial app Moneybox and Monzo to help people to save and invest.
The partnerships together have helped OakNorth reach around 2.7 million customers.
“These types of fintechs don’t offer savings as a source of funding for lending, so their users miss out on earning interest on their cash balances,” said Amir.
Amir explained that, as it was a fully regulated bank offering FSCS protection for depositors, it tended to be particularly appealing to higher-earning demographics who have tens of thousands of pounds to deposit.
It also means it can bring its savings platform to a wider demographic and enable younger savers, who may not have as much to save, to still make more from their money.
“We are in conversations with several other fintechs about partnering, so [we] expect to announce more in the coming months — watch this space.”
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Temenos partners with ClearBank for cloud payments
Banking software company Temenos has formed a strategic relationship with ClearBank to provide banks with a faster route to market for real-time cloud payments...
Unity Trust Bank registers 34% rise in profits
Unity Trust Bank increased profits by 34% in 2019...
Believe the hype – why explainable AI is a trend that’s here to stay
Technology has become a ubiquitous part of our day-to-day lives...
Piloting tech updates: ‘The bigger the bank, the harder it is to get anything done’
In the latest Medianett filmed roundtable session, we discussed how important technology is in the banking space, and what impact the industry expects it to have on its businesses in the future...
What banks need to know about cloud security
One of the most common perceived concerns when adopting the cloud is the issue of security...
OakNorth sees 95% increase in pre-tax profits
OakNorth Bank has announced a 95% rise in pre-tax profits in 2019 to £65.9m, up from the £33.9m recorded in 2018...
Redwood Bank signs up to Women in Finance Charter
Redwood Bank has announced that it has signed up to the Women in Finance (WIF) Charter...
Masthaven launches digital Women in Leadership programme
Masthaven Bank has launched a new Women in Leadership digital development programme for female senior leaders...
Protecting against supply chain disruption and the domino effect
Disappointingly, many UK SME business owners don’t understand their supply chains...
Confused about which Isa to choose? Hopefully this mini-guide will help…
We are now firmly in Isa season, so you’re likely to read multiple articles about the most competitive Isa products in the market and how best to make the most of your Isa allowance before the end of the tax year...
Garden shed entrepreneurs contribute £16.6bn to the UK economy
Entrepreneurs who run their businesses from garden sheds contribute £16.6bn annually to the UK economy, according to a recent study...