Santander Stands Alone: A New Brand For Digital
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Sticking to our new Monday format, we’re going to take a close look at one of the most interesting stories of the week’s show. For analysis straight from industry experts subscribe to our podcast!
Fintech Insider hosts Laura, Sarah, and David sit down with Charlie Wood, Principal Consultant at Capco, and Simon Vans-Colina, Engineer at Monzo. to discuss the news, including big banks moving into the digital-only space.
Carved Up Cash
Space races are cool, let’s have a space race - Simon Vans-Colina£833 million, 71% of which is taxpayer money, was cut away from RBS’ budget to encourage business banking across the financial sector. The money was originally intended to get smaller banks into the area and boost competition. But for controversial reasons around the cap for qualification, Santander has been allowed to bid for it. It’s worth noting that the other eligible banks are considerably smaller.
This is cruel and unusual punishment for Williams & Glyn - David M. BrearSMEs are a notoriously underbanked sector of the market. So, even if there are multiple competitors it’s not a bad thing. It’s pursuing the goal of the fund which is to encourage more entrants into the market. It just so happens that this entrant is a little bigger than expected.
Santander Taking On All Challengers
The new digital unit of the bank is designed to solve multiple common SME issues regarding payroll and pensions. It was originally outlined in October 2017 along with three other independent digital companies. But Santander have only recently revealed the UK as their target market.
I don’t think we’ve made a decision one way or the other - Simon Vans-ColinaMoving into the digital space is probably a conscious move to compete with digital challengers like Monzo and Starling. However, Monzo has yet to make any announcements one way or the other regarding business accounts. And although Starling recently released a business account it has a tight focus on LLCs with one majority owner. Santander is the first major bank set to launch a separate brand for digital product offerings. How it'll differ from the current offerings on the market may make for some radical new changes in the space. Don’t forget to subscribe to the Fintech Insider podcast here and comment below with any insights you’ve got to share or join the Fintech Insider News community here.