For traditional banks that are trying to change themselves, they find that the digital transformation process is a long-drawn exercise that involves cultural change and organizational change apart from just the technology changes – this makes it not only a hard nut to crack, but a multi-year endeavor and something that costs a lot. Any evolution requiring multiple and varied changes to be made takes a significant amount of time and money when it comes to legacy institutions and their systems. Even then, the impact of the outcome is not certain or guaranteed. It may just happen that by the time you finish your digital transformation exercise, the best in class have moved the industry even further. As traditional banks are still figuring this out, they often find an innovative plan B that can be run in parallel – not as an alternative, but as a separate endeavor: a standalone digital banking offering that is entirely mobile-first, or even mobile-only. Between 1997 and 2019, there have been several traditional banks coming up with a separate digital banking app/brand/tech platform for customers as a new standalone bank.
At MEDICI, every quarter, we study mobile-first digital banking approaches taken by banks around the world, providing a detailed list of significant players in the space. In January 2019, we came up with an infographic; now, we have built on it further, presenting updated information on these banks and their standalone digital banking offerings. As before, we looked at online/virtual/digital banking initiatives/apps created by traditional banks globally. We want to point out that for the purpose of this article, we haven’t considered challenger banks such as Revolut, Monzo, Starling, N26, and other, similar ones.
In our previous article on this topic, we covered some traditional banks & FIs that have launched their own digital banks, including Marcus by Goldman Sachs, Hello bank! by BNP Paribas, digibank by DBS Bank, and BankMobile by Customers Bank, among others. Here is a list of some other banks with mobile-first digital banking offerings:
- Pepper by Bank Leumi was launched in 2017 in Israel and is one of the few digital banks providing customers with a physically couriered checkbook. Additionally, it offers its customers a credit card, a savings account, personal loans, and PFM tools.
- B by Clydesdale Bank & Yorkshire Bank was launched in the UK in 2016. It offers customers a current account that pays interest on balances up to £2,000, as well as an instant savings account. It also provides both debit and credit cards, incorporating Touch ID, Apple Pay, and Android Pay.
- 811, a standalone offering by India’s Kotak Mahindra Bank, was launched in 2017. 811 provides customers with a digital banking account with multiple benefits, including zero balance, 6% interest, and a virtual debit card on one’s smartphone.
- Liv., a millennial-focused digital-only bank by Emirates NBD, was launched in 2017. Liv. is working on a variety of services targeting the specific needs and social habits of its millennial customer base. It has features like bill splitting and can let customers pay via their Liv. debit card. Customers can also send money request notifications via social channels, including WhatsApp and Facebook, to friends and family.
- Hype was launched by Italy’s Banca Sella in 2015. It is an electronic money account that allows customers to have an IBAN and a payment card for all their purchases. They even offer a contactless card in association with Mastercard. The user’s account is linked to their phonebook, and money can be sent to or received from their contacts with ease in real time.
- TMRW by Thailand’s UOB debuted in 2019. It is powered by artificial intelligence (AI), machine learning (ML), data analytics, user interface design, and smartphone capabilities. It is said to be the ‘first mobile-only bank designed for ASEAN millennials who prefer to bank on their mobile phones, anywhere and at any time.’
- YOLO, launched in 2018 by VP Bank in Vietnam, lets customers use the app for a diverse range of daily activities beyond just banking. It offers prepaid virtual cards associated with Mastercard, in addition to savings services, interest payments, and loans.
Now, let’s take a look at the region-wise breakdown of digital banks which has been updated to include a few more standalone mobile-first/mobile-only banks launched by traditional players:
- In North America, banks/FIs that have launched their own standalone digital banks are Wells Fargo (Greenhouse), JP Morgan & Chase (Finn), Customers Bank (BankMobile), Green Dot Bank (GoBank), Goldman Sachs (Marcus), CIBC (Simplii Financial), Capital One (Capital 360), Scotiabank (Tangerine), Republic Bank & Trust Company (MemoryBank), and Flushing Bank (BankPurely).
- In Europe, the banks/FIs that have started their own digital banks are RBS (Bó)*, Hype (Banca Sella), BNP Paribas (Hello bank!), Unicredit (buddybank), Banco Santander (Openbank), Clydesdale Bank & Yorkshire Bank (B), ABN Amro (Moneyou), CaixaBank (imaginBank), OTP Group (Touch Bank), and AXA Bank (Soon).
- In the Middle East, the top banks/FIs that have set up their own digital banks are Mashreq Bank (Mashreq Neo), Emirates NBD (Liv.), Bank Leumi (Pepper), Gulf International Bank (meem), and Commercial Bank of Dubai (CBD Now).
- In Asia & Africa, the banks/FIs that have launched their own digital banks are DBS (digibank), State Bank of India (Yono), Kotak Bank (Kotak811), CITIC Bank and Baidu (aiBank), VP Bank (YOLO), UOB (TMRW), WEMA Bank (ALAT), Halyk Bank (Altyn-i), and Standard Chartered Bank.
- In Oceania, banks/FIs that have launched their digital banks are Bendigo and Adelaide Bank (Up), and NAB (Ubank).
*We should mention that Bó by RBS is still in the works and is planning for a launch later this year. Interestingly, it has already started investing in the kind of tech it would need to compete with other key players in the space effectively. We’ll bring you more on this as it unfolds.
Note: Are you are a bank, looking to do something similar? Please write to us; we would love to speak with you.