Digital challenger bank Fidor has passed the 200,000 customer mark, but its CEO warns that the “happy days of fintech are over” and new players will need prove their worth.
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Fidor was an early financial technology (fintech) player and offers a retail banking service as well as its open-technology platform to other banks as a service.
In its own banking service, Fidor uses social media to overcome the cost and complexity of traditional banking, and increases customer trust through an online community.
Through an application programming interface (API), it enables third-party financial services to plug in to its system. This means current account customers can access many different services and can deal in foreign currencies and precious metals with the same current account, for example.
In a major fintech development, the German challenger, which was set up in 2009 and gained a banking licence in the UK in 2015, was acquired around a year ago by French banking group BPCE. BPCE has 35 million customers,108,000 employees and 8,000 branches in France.
At the time, CEO Matthias Kröner said the bank’s acquisition meant it has adopted an “attack formation” with the acquisition taking it from potential challenger to a real threat to the status quo in retail banking.
Kröner said the acquisition has slowed its progress temporarily due to its size and the need to meet regulations, but he added that he is “extremely optimistic”. There is no wonder for this optimism, with 200,000 customers and a total of half a million members in Fidor’s online community.
However, despite Fidor’s successful journey, it is not easy for fintech banks to establish themselves today, warned Kröner. “I think the environment is getting tougher and the happy days of fintech are over. The concepts [of fintech] now need to prove their raison-d’être,” he said.
“It is not a self-fulfilling prophecy – just calling yourself a challenger [does not mean] you will be acquired,” he added.
According to Kröner, the big banks won’t be toppled any time soon but he believes companies that lead change in the banking sector now will prosper in the future.
“Established banks have been around for decades, spending billions in communication. It would be naive to think all that changes over night. But the landscape is changing and the companies that drive that change or adopt to it will definitely have a better future than the others,” he said.