Now's the time for high street banks to innovate, or else

Turmoil at "flanker" banks comes at a worrying time for our incumbents.

Originally published in The AltFi Weekly Newsletter, for more like this sign-up now.

Last time I wrote about the great push for profit in the world of fintech, but the pressure on high street banks to innovate has now never been greater.

It’s not just the fact that millions of customers are opening digital banking accounts, (Monese says it’s on track to have over 5m by year-end) or the billions being raised in venture capital (rumblings that Monzo is working on a Vision Fund round were reported in The Sunday Telegraph).

No, the real concern for many high street brands will be last week’s quarterly account switching figures.

The figures prove that their digital rivals finally have the clout to lure over banks’ most lucrative customers, en masse.

Monzo clocked in over 21k primary account customers in Q4 2019, and those numbers are only likely to grow.

At the same time, big banks are seeing their innovative spin-off projects become increasingly muddled.

RBS is due to bounce the boss of its Bó banking app in the coming weeks, while Sifted yesterday highlighted the early and ongoing challenges facing its business digital bank Mettle.

It's not all doom and gloom, BBVA is seeing success with its digital banking brand Holvi launched in the UK yesterday led by Antti-Jussi Suominen (pictured).

But if you want to see just how quickly our high street banks could be left behind, just take a look at Australia, where digital upstarts have secured over A$1bn in deposits in mere months.

It’s time to innovate, or else.