Fidor UK launch promises social media revolution in retail
Online-only bank Fidor has launched in the UK, promising to change the way retail banking works by letting the customer build the services and products they want to use. The bank is part of a new wave of fresh banks entering the market, many of which focus their efforts online rather than on the high street.
Fidor was created in Germany in 2009 and is the first challenger bank to launch in the UK since 2010. The bank is launching with a current account and saving bonds service, as well as a Euro transfer service under SEPA. It plans to add other features including a debit card and mobile app in the coming months. Fidor also provides a select range of ‘60-second banking services’, with customers able to complete any of these financial transactions with one minute.
Its main selling point is its customer-friendly, community-based approach. The bank says its key service is a community where customers receive financial rewards, such as cash, improved interest rates and savings bonds, for helping each other with financial advice as well as suggesting products and services to help Fidor improve.
“We only create products and services after people in the community request them – We are a listening bank: if people want it, we’ll create it,” said Matthias Kröner, chief executive of Fidor Bank. “The UK should be excited about a genuinely customer-centric bank that really has the customer’s interests at heart. The community is the foundation of Fidor Bank.”
Kröner added that the problem with most banking models is that they create products and services, then try and sell them to the customer. Fidor wants to do the reverse and create a bank where the customer gets to build the services and products that they want to use, he said. “That is why we focus on the community – the customers are shaping and building Fidor Bank.”
Fidor is taking quite a radically different approach to fellow challenger bank Metro, which opened in the UK in 2010. Whereas Metro has focused on building up a large network of bank branches, re-branding them as ‘stores’ and focusing on customer-friendly service in person, Fidor will not have any branches at all.
“With the growth of social media and online communications we don’t think branches are necessary,” Kröner told Banking Technology. “Customers are digitally-savvy these days and are using online banking more and more. Modern banking needs to be quick, easy and accessible on the move as we lead increasingly busy lifestyles and often don’t have time to go into branches to sort out our finances.”
Kröner added that by not having branches – which are ultimately paid for with customer money – the bank will also be able to ensure maximum returns for its customers. So far, this approach has netted the bank about 100,000 customers in Germany.
In the UK, FIdor is currently operating on an indirect agency banking model through a UK provider, but will to be moving to a direct agency banking system in the coming months.