Blog 53


Everyone is probably tired of reading what “millennials have ruined again” - we’re still shocked by their impact on avocados and diamonds. But it is worth noting that their behaviour has had a significant influence on the products we use today due to having a larger digital presence, which modern businesses have been capitalising on.

There are a lot of tech products that have come out of a need to adapt to modern consumer behaviour, such as fintech, subscription based entertainment and holiday lets. Lots of businesses were started by the younger generation too to address certain gaps in the market, such as media companies that rely on social media or financial services to tackle established banks.

No wonder that traditional businesses are struggling to keep up. The UK high street has probably suffered the most in the last five years due to the rise of online retailers and changes in shopping habits. However, banking is also in a pretty similar situation, with younger consumers putting more trust in online-based fintech startups than high street banks. This is a clear sign that established businesses who have relied on the habits of the previous generation need to adapt to the new ones to remain in business.

What can financial institutions learn from fintech startups?

New fintech companies are popping up all over the world. Some of them have grown to become fully regulated banks, like Monzo, Starling Bank and Atom Bank. Some offer comprehensive banking services and some focus on specific financial services like money management that are easy to use and quick to sign up for. These financial industry challengers are very popular with the younger generation. While the core business hasn’t changed, the newer companies focus on delivering a great customer experience via technology, alongside an appealing brand and marketing message. To be able to keep up, financial institutions (FIs) can learn a thing or two from them.

monzo onboarding


With Amazon and Deliveroo leading the ranks in delivery services, it’s obvious that convenience and efficiency are some of the reasons for their substantial growth. Their services are available directly from your phone. Banking should be no exception.

While traditional banks have standard working hours, long queues and require lots of paperwork to open an account, online banks are much more adaptive to remote customer onboarding and interaction. You can apply for an account with Monzo, Revolut and Atom Bank directly from your phone. You just need to upload your ID and proof of address. Having no physical branches also allows them to invest more in development and design, which brings us to the next point.

fintech cards

Interactive UX and fun branding

More and more brands are focusing on the user experience and appearance of their apps. Older banks may have all the services a customer could want, but a bank like Monzo can easily win them over with a modern design and smooth UX of their app. Great branding, design and customer journey are far more appealing than dull apps, especially in areas like presenting data or switching between products or services.

Some of the banks have only just managed to get their mobile banking apps up to speed, but not all have the best design or UX. More consumers are prepared to ditch their banks if the app isn’t working for them. The problem is not fully understanding the pain points of a customer’s journey. Banks may invest in new tech, but many fail to see it from a customer’s point of view. This is something challenger banks and FIs have realised and their popularity is a testament to their efforts to focus on the customer.

Banks could also consider how to extend their brand beyond the online experience. While few customers actually want to go to a branch, it’s possible to do something simpler. Monzo’s bright coral card was a fantastic marketing tactic to promote the product. People would often ask what card it was and where they could get it. It got people talking and it made their customers feel like they were part of a secret club.

But retail banking can also be elevated. Klarna, a leading global payments provider and fully-licensed bank, has recently set up a few pop up stores with different events which aimed to demonstrate to customers and retailers how to transform the shopping experience.

emma money management

Money management

Something that more customers look for is money management and savings. With the rising living costs, many struggle to save or budget, so any useful tools from FIs are a great way to help their customers and build loyalty. Perhaps the rise of Open Banking could improve these services, but very few established banks do this at the moment, especially through their apps.

On the other hand, Monzo displays daily spend with broken down categories, offers pots where customers can set money aside and earn interest, as well as offering to set limits on spend over different periods.

Yolt and Emma are gtreat apps that connect various bank accounts thanks to Open Banking to display spend and help manage finances easily.

Tranferwise offers quick and transparent international money transfers with fees beating leading banks. They even display a fee comparison for how much a user would pay when making transfers from a high street bank.

Human contact

Gone are the days when the only way to resolve an issue was to go to a local branch, potentially having to set up an appointment in advance. However, customers don’t want to resolve issues through an automated system, so speaking to a human is also important. More and more FIs are offering live chat and customer services that you can get in touch with direct without having to make a phone call or sit on hold. While the younger generation prefers minimum contact, when contact is made, it is still best to have a conversation with a real person on the other side of the phone to resolve an issue. Monzo and First Direct bank are known for their excellent customer services.

Flexibility around trends

Companies like Spotify and Netflix are so popular because they spot consumer trends and tailor their content accordingly, constantly adapting it. They also listen to what their customers say. It really helps that their products are built on modern technology that is easy to adapt and scale. Traditional banks are built on legacy systems that aren’t as easy to change. In addition, the sheer size of traditional banks makes the decision making process difficult to achieve. However, this reflects poorly on their customer experience. So it’s important to take note of customer feedback and make changes to build a better relationship.

Monzo has recently rolled out a new version of its app. The new interface took some getting used to and they seemed to have some customer complaints. To explain the new changes, they shared their customer feedback and how they’re going to address it. They’re very transparent and to the point, which helps to build trust and learn that they are adaptive and listen to what their customers say.

Digital is here to stay

Millennials can be seen as a difficult market, but they are the next generation who will be consuming financial services, and banks will need to earn their loyalty. With tech developing further, it’s inevitable that traditional FIs will need to rapidly improve their digital estate. While the financial industry won’t change much at its core, challenger banks and FIs have already shown a great example of winning over customers with more appealing apps. If traditional banks don’t catch up early on or improve their existing offering, they will end up losing out to newcomers who are eager to take over some of the market share.

If you’d like to discuss how we could help you improve your digital offering, get in touch.

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