In the U.S. today, there are at least 40 digital-first challenger banks. The U.K. has more than double that.
Now granted, you can debate what is and isn’t a challenger bank until you’re blue in the face. Does it mean mobile-only? True checking accounts or merely payment tools? Are they backed by FDIC insurance? There is no one definition, but honestly, it doesn’t really matter.
Regardless of how you slice it, the overarching commonalities boil down to this: These entities use the power of innovation, digital technology and data to disrupt and redefine “banking as usual.” They challenge the status quo.
Collectively these upstarts definitely have bankers on edge, and some are starting to mess with bankers’ heads in a big way. For instance, Chris Nichols, Chief Strategy Officer for CenterState Bank, says Marcus by Goldman Sachs poses a real threat. He also closely monitors challenger banks N26, SoFI, Varo and BankMobile.
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