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How will specialist banks innovate next?

Theo Osborn | 09:00 Wednesday 28th August 2019

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.”

Dynamic loans

Dynamic Loans

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.”

B-North isn’t the only banking hopeful looking to innovate in the SME market, with Recognise, Gravity and revverbank also aiming to reimagine business banking.



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.”

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