Banking Trends and Innovations

IT has totally revolutionised banking almost entirely to the benefit of the consumer. In this article we explore current banking trends and innovations that you need to be aware of.

Challenger Banks and Digital-Only Banking

The hey-day of the banking giants is behind us. In fact in the 21st century the High Street bank is struggling to contend with its digital counterpart.

The first significant competition for the long established banking community emerged from the Challenger Banks; small retail banks that originated following the 2008 financial crisis.

Challenger Banks provide digital banking however; some still maintain a physical presence in our towns and cities. Metro Bank is one example of this. It currently has 60 branches nationwide and in 2010 became the first institution to gain a full banking licence in over 100 years.

Challenger Banks often specialise in particular services, and as such do not all offer the full suite of banking facilities. They are however highly competitive in terms of offering better rates of interest as a result of their operational cost savings.

Digital-Only Banking as you would expect offers an online only presence and services are accessed via tablets and mobile phones by downloading the relevant app. There are no branches maintained and services are for the most automated. Customer service is often provided initially via a Chatbot facility with complex queries escalated to a team of customer care staff however telephone support is also available.

While many traditional banks offer digital services, the digital-only banking facilities are often enhanced providing improved control of finances. For example you can access spending updates and analysis at any time, enjoy commission free spending outside of the UK and apply security measures such freezing cards or changing your PIN all through the app. Some digital-only banks also now offer the ability to trade cryptocurrency.

Challenger banks and digital-only banking services tend to offer the latest in innovations and may be the most cost effective solution for your personal and business banking needs. You can view a list of challenger banks, digital banks and banking apps here.

Prepaid Debt Cards for Business

Prepaid business cards or debt cards are becoming more commonplace, and are one of the facilities offered by the popular digital-only bank Monzo.

They allow you to access an individual or number of cards, to utilise yourself or distribute among your workforce for the purpose of making business purchases or withdrawing cash.

They have the advantage of not incurring interest on purchases, unlike credit cards, and allow you to adhere to a strict budget, aiding accurate financial forecasting. They can also be obtained without the need for a credit check.

Prepaid cards do however incur some charges such as monthly or annual fees and as such you need to read the small print before making a final choice. A comparison of some of the available prepaid business cards can be viewed here.

Cryptocurrency & Blockchain

Cryptocurrency and blockchain technology are actually very logical concepts to grasp. However, when first encountered they can cause MUCH confusion, particularly when you are relying on random explanations provided by your search engine. With regard a simple explanation, many people have tried, and failed! So, if this is a topic you that you have yet to master we hope to help.

Cryptocurrency, for example Bitcoin, are simply global, digital currencies that can be bought, sold, used to make purchases and invested in. We found an excellent guide on Cryptocurrency here if you want a more detailed yet highly accessible explanation.

Blockchain is the digital, public ledger, where the finite currency, and all transactions relating to it, are recorded. Its benefits include its transparency, speed of exchange and level of security.

In a recent article for Forbes, Alan McIntyre, head of global banking practice at Accenture commented that ‘2020 could see the introduction of a: tokenized central-bank-issued currency capable of being cleared and settled instantaneously between trading partners.’ This follows the news that the Peoples Bank of China is poised to release its own central bank digital currency.

Blockchain technology is predicted, as it outgrows the limitations of cryptocurrency, to solve problems within banking infrastructure including more efficient exchanges of goods and services at significantly reduced costs. Examples of Blockchain in business include smart contracts, cloud storage, supply-chain communications and paying employees. You can read more about applications of Blockchain that could aid your business here.

The Final Word

In this article we have looked at what we consider the most relevant banking trends and innovations at this time, however this is an ever evolving aspect of business. As we have commented you are more likely to access the most innovative banking solutions by choosing a Challenger or Digital-Only bank, including prepaid debt cards. With regard cryptocurrency and blockchain, it’s a case of watch this space, although you may already be utilising aspects of blockchain when dealing with other businesses and customers.

As always if you have any queries or comments about the content of this article we would like to hear from you. Also if you are utilising cryptocurrency or blockchain and would be happy to share your experience we would be very interested to hear about it and with permission, share your experience with our other readers.

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