Top 10 challenger banks and fintechs
With the rise of digital-only banks, the sector has become more competitive than ever. In no particular order, FinTech Magazine lists the top 10 challenger banks launched by incumbents
10 | Holvi (BBVA)
BBVA-backed fintech, Holvi is a payment service launched in 2011, designed for freelancers and entrepreneurs. The platform provides financial management tools as well as a business account to help these individuals better manage their funds. The FinTech is headed by CEO AJ Suominen, whom you may recognise from a number of other institutions such as Nokia, Habbo Hotel and Sulake.
Holvi has recently announced that it will be expanding into the UK. Suominen had this to say: “[The UK] is the biggest sole trader market in Europe. There are nearly 6m small businesses and three-quarters of those have no employees, i.e. they are one-person operations. If you want to make it big in Europe in this area you have to be in the UK at some point.”
HQ: Helsinki, Finland
9 | iZettle (PayPal)
iZettle is a Swedish financial technology company founded by Jacob de Geer and Magnus Nilsson in April 2010. They launched its first app in 2011, making them the first company to develop chip-card readers and apps for smartphone-based mobile commerce which meet international security requirements. The fintech derives its name from a stylised portmanteau of “I settle” in reference to settling debt.
The company was acquired by PayPal in September 2018 for US$2.2bn. Bill Ready, Chief Operating Officer, PayPal. "iZettle brings a suite of products and services that allows merchants to meet their customers where they are - online, in store or via mobile. This is another step in our journey toward democratizing commerce."
HQ: Stockholm, Sweden
8 | LightStream (Truist)
From financing your kids’ education through to buying a boat, provider LightStream, a division of SunTrust Bank, which recently merged with Branch Banking and Trust Company (BB&T) to become Truist, has “loans for just about everything.” LightSteam combines its lending products with proprietary technology so that consumers with strong credit profiles can receive highly competitive, fixed rate financing via a digital process. It does not charge fees on personal loans, and offers US$100 to dissatisfied customers.
HQ: Atlanta, GA, US
7 | Openbank (Groupe Santander)
Openbank, a popular subsidiary of Grupo Santander, is the digital-only bank headquartered in Spain. Founded in 1995 by Banco Santander, the website was launched the following year, making it one of the older digital banks around. Today there are 1.35 million accounts registered with the bank. Stand-out features include its 24/7 support line, open to customers at all times. Openbank allows customers to deposit or withdraw cash fee free from over 4,500 ATMs across the Santander services in Spain. As of last year, it began its expansion across Europe to Germany, the Netherlands and Portugal.
HQ: Madrid, Spain
6 | Bó, (NatWest)
Bó is one of the newest challengers to be launched by a legacy bank, entering into the market at the end of 2019. A part of NatWest, the account is designed to be secondary to the legacy bank, allowing the tracking of monthly spending. Bó is a full bank account with a Visa debit card. According to the site, customer’s finances and data are protected under the Financial Services Compensation Scheme (FSCS).
HQ: London, UK
5 | E20 (Emirates NBD)
Still in beta mode, the widely anticipated digital bank E20 was designed with SMEs in mind at the end of 2019 . One of two challenger banks launched by Emirates NBD, E20 will allow business owners to conduct international and local transfers, generate invoices, track receivables and view P&L statements. It can also share information on VAT returns. “E20 will help business owners manage their finances and cash flows efficiently and in an affordable manner while also powering their decision-making and growth plans,” said Shayne Nelson, Group CEO of Emirates NBD.
HQ: Dubai, UAE
4 | Liv by (Emirates NBD)
Liv has built upon the success of Emirates NBD, currently boasting over 300,000 clients since its inception in 2017. The digital lifestyle bank launched for millennials gained an estimated 10,000 new users a month, the same growth rate as that of parent company, Emirates NBD. “This shows us that there was demand and we are meeting that demand,” shares Richard Morton, Associate Vice President for Legal, Emirates NBD, in an exclusive interview with FinTech Magazine. The app features a real-time expense tracker, financial "goals" to assist with in-app saving, and a number of deals and events tailored to its target audience.
HQ: Dubai, UAE
3 | Imagin Bank (CaixaBank)
Imagin Bank is CaixaBank’s digital, Spanish-only bank designed for millennials. Much like other challenger banks in Europe, Imagin is fee-free, with a number of personal finance tools and offers current accounts, debit cards and consumer loans. Over a third of CaixaBank’s customers are aged between 18 and 35, lending its legacy customer base strongly to the digital-only bank. CaixaBank's CEO Gonzalo Gortázar comments: "What we have created is a simple service offering; one that charges customers no maintenance fees but is comprehensive enough to cover all of the financial services demanded by the young target market.”
HQ: Valencia, Spain
2 | Marcus (Goldman Sachs)
The new challenger bank from Goldman Sachs has borrowed its name from Marcus Goldman, who founded the parent company in 1869. The creation of Marcus is a part of Goldman Sachs’ strategy to add US$5bn to its revenue by 2020. The online bank is fee-free and offers high interest savings accounts, with bonus rates available to all customers. Up to £85,000 of any money held by the bank is protected by the Financial Services Compensation Scheme (FSCS).
HQ: London, UK
1 | Ally bank (GMAC)
Ally bank has been around since 2004 and belongs to parent company Ally Financial. The online-only bank is particularly renowned for its high interest savings accounts. It is worth noting that each month Ally will start to charge US$10 from the sixth outbound transfer onwards, but that’s a worthy compromise given its high interest rates of 1.60%, which is compounded daily. Customers can access over 43,000 ATMs, and Ally will reimburse $10 per statement cycle for any fees charged using an out-of-network ATM in the US.
HQ: Sandy, UT, US