Challenger banks and embracing irrationality in banking

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Challenger banks (also known as neobanks or sometimes online-only banks) are pushing the traditional banking sector with novel solutions, user centric products, and impressive traction with customer acquisition.

If you’re not familiar with them, challenger banks are independent companies or nimble brands under the umbrella of established financial institutions. They can be skunkworks operations targeting a new business model, customer segment, cost structure, brand, or strategy. They vary from startup companies providing a full range of banking services, to smaller, specialized brands with one or two specific offerings.

You may have heard rumblings that ATB is launching a challenger bank. Well it is certainly true that we’re always looking to challenge ourselves—and what better way to do that than to take a team of exceptional team members and set out to develop a standalone banking solution that creates better experiences for people in life, not just in banking.

In fact, what we’re focussed on challenging is the fundamental perspective that banks are meant to help people be responsible and rational with their money. Because banking is something that is done to you, not for you. We don’t want to change people, we want to support who they are by providing banking services that are delightful, simple to use, and improve the experience of daily activities.

Banking is a very rational dimension of life. However, what people feel about their money and finances exists on a separate plane, one that is driven more by emotion than rationality.

When we started looking at how we could challenge ourselves and the banking sector, we started out not just by looking at what other challenger banks are doing around the world, but we also took the time to stop and listen to what Albertans want. With over 600 one-on-one interviews and dozens of focus groups to-date, we’ve uncovered valuable gems about what people want from banking products.

In fact, what we uncovered is that banking products are not necessarily broken. We don’t have to entirely change how chequing accounts and credit cards work. We uncovered that people want digital offerings that help them do what they are already doing outside of banking. For example, vault accounts where people implement their own controls on how and when they can access their money.

We’re serious about finding out how to make banking feel good, which is why we’ve partnered with researchers from the University of Calgary to validate customer feedback on banking and user interfaces that create happiness and reduce stress.

One of the greatest benefits of challenger banks is that they are not weighed down by legacy systems. In many cases, the ‘why’ behind processes and requirements in banking is like the pea at the bottom of a pile of mattresses. We’re committed to peeling back to the fundamentals, breaking paradigms, and stepping out of the traditional perspective to embrace irrationality and the human aspects of finance and banking.

We want to open as many channels as possible for customers, so they can drive the experience, rather than saying ‘here is the right thing to do with your money.’

To put the power in the hands of our customers, we are building a flexible operating system based in the cloud and partnering with incredible companies like Technisys out of Argentina and other top fintechs through API interfaces.

Just like Albertans, at ATB we’re not the type to sit back while the world changes around us. We’re taking this challenge head on, getting our hands dirty to challenge ourselves, and banking. Can’t wait to hear more? Subscribe below.x