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In the last couple of years, mobile banking has grown from being a fairly niche channel adopted by only the tech-savvy to one of the most common ways for people all across the world...

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August 4, 2016
/   Insights

Britain will soon become the latest country to release polymer banknotes into circulation, joining nations such as Australia, New Zealand, Canada and Vietnam in the shift to plastic currency.

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

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Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

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/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

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/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

A couple of times on this blog, we’ve mentioned in passing a German startup named Number26. This mobile-first venture has grand ambitions—it calls itself Europe’s ‘most modern bank’ and is launching new initiatives at a fast pace—though it’s still a small player in a small field.  That said, firms like these are gaining market share and, in some cases, substantial VC backing. Most importantly, they’re worth watching not only because of what they’re doing but what they represent.

In sum, they offer a peek into the possible near future, one that encompasses a new generation of small but focused challengers taking on the established order. They do things very differently in a range of areas, from the technologies underpinning the business model to the entire market approach.

For example, BankMobile, another player in this field, claims credit for being the “first bank in the country to offer free checking and savings accounts without any fees.” Then there’s Simple, which promotes the “whole idea of banking re-made with beautiful design, built-in tools for budgeting and saving, and genuine human goodness.” For its part, Number26 boldly claims that it’s creating “the bank of the future.”

That means placing its mobile app at the center of all transactions and interactions. This single piece of software offers an entry point into a variety of offerings, some its own, and many others from partners.  As just one example, earlier this year the company struck a deal with England-based TransferWise, a rising peer-to-peer money transfer firm. That gives customers of Number26 easy access to currencies from nations around the world.

The strategy seems to be paying off: In less than three years, the startup has already reached far past its home base and gained a noticeable footprint in such competitive markets as France, Italy, Ireland and Greece, as well as some smaller countries where it has a chance to become a major contender in the local banking industry.

But there’s another sign of success worth monitoring: financial support. Number26 earned early attention in part because one of its early backers was venture capital star Peter Thiel, who made his billions with such ventures as PayPal, which he co-founded, and Facebook, which he backed with several rounds of investments. Now, Number26 is getting a new round of attention with a new round of backing totaling $40 million from several VC firms. For a company this size that’s a substantial boost, and the new funds will be used to strike more partnerships and offer more services to more markets.

To be clear, the firm is focused primarily on markets in Europe. But if Number26 doesn’t bring its business model to the US, other ventures like it surely will, and some have already.

It will be interesting to see how this plays out. The financial services industry has always been relatively (and that’s a key word) stable because the barrier to entry is so high. The technology industry builds on releases from disruptive startups to grab huge market share with astonishing speed, and existing platforms become obsolete virtually overnight. That’s why there are new entrants in the technology top 10 on a regular basis. By contrast, it’s virtually impossible for an upstart in the financial services field to dislodge the likes of Citigroup and JP Morgan Chase.

These new entrants probably change that equation right away, but they have the potential to make a major dent. They’re not pure financial services providers, and they’re not tech firms per se—they’re a curious hybrid that draws on the best of both worlds. And their strengths are distinctive.

They’re lean and aggressive, with a much smaller body count than their traditional rivals. While established institutions lack flexibility, these companies rely on a scalable network infrastructure that can be adjusted easily to take advantage of everything from market shifts to new partnerships. They form strategic alliances with other fintech vendors to offer new services, all through a constantly changing mobile app. They’re ready and willing to abandon cherished norms in order to benefit from a changing business environment. And the more VC backing they get, and the more capitalized they become, the more of a threat they represent.

These are the undeniable characteristics of the next wave of financial services providers. How does that match up with current options?



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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp


Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.