The race to revolutionise the UK banking landscape kicked off as regulation was relaxed to make the bank sector more competitive. Throughout 2017 and 2018 the floodgates well and truly opened as new fintech start-ups were launched on an almost weekly basis. Many of these fintech start-ups have come to be known as “challenger banks” which analysts at PwC call a misnomer as it lumps fintech start-ups together with banks that they have no interest in competing with. Many of these start-ups are focused solely on specific services like mortgages, savings or small business banking. With all this activity it can be hard to see who is truly being innovative and who is just riding the wave. Below are three start-ups that stand out from the crowd. Their inclusion here is not to say that their venture will be successful but that what they are doing is disruptive.
1. Amaiz
Amaiz is not a bank in any sense of the word. It may be best described as a financial aggregator. It brings all your bank accounts into one place for the user to see their complete financial picture without having to log in to multiple apps. It also allows you to transfer money quickly and easily using Apple Pay, phone numbers and traditional account details for free. With all this data it is hoped that users will be able to make smarter financial choices.
Amaiz is not a banking play in as much as it’s a data play. They will make their money from the consumer spending data they can provide to businesses by having complete access to all your transaction data across all your accounts. As I said not a bank in any sense of the word.
2. Chip
Again, Chip is not a bank in the traditional sense in fact it integrates with the traditional banks like Barclays. Chip is more of a e-wallet as it helps users save money by rounding up your expenses and moving the rounded sums to a savings account for you. Now that isn’t particularly innovative as apps like MoneyBox have been doing this for some time now. What is innovative is that Chip does this using AI. Rather than rounding up to the nearest pound or saving a pound with every transaction, Chip’s AI technology dynamically reviews your spending habits to calculate how much you can afford to save at any given time even if you are overdrawn.
Chip’s growth will be interesting to see as the data it provides will only get more intelligent as we move into a world of predictive spending. Someday soon your local supermarket will know precisely what your next purchase will be and have it bagged and ready when you arrive.
3. Coconut
Coconut is a prime example of a start-up whose timing could prove to be perfect. Coconut focuses on providing account monitoring services to self-employed people and freelancers. The app helps users by categorising their income and expenses and calculating approximately how much tax the user might have to pay so they can save for it. Hopefully avoiding nasty surprises.
As previously stated the timing of this app could be transformational as its well placed to capitalise on to key trends. Firstly, millennials are choosing in larger and larger numbers to have a more flexible approach to work by freelancing and are often pushed into the “gig” economy to make ends meet. Their variable and diverse incomes can open them up to a potentially nasty tax liabilities which is exactly what this app aims to prevent. Secondly HMRC is going fully digital to more accurately collect taxes and a direct link to that service could be an absolute gamechanger for apps like Coconut.
There are many fintech start ups looking to own a piece of the UK’s well-established financial services sector and it is almost impossible to predict who will succeed. Especially as many will likely be squeezed to death or gobbled up by huge incumbents like HSBC and RBS. What is assured is that the future of banking has already changed for good and in the not too distant future the way we bank will be very different.