Revolut, a UK-based fintech founded the same year, has amassed 6m customers and a US$1.7b valuation. In Revolut's case, the main attraction is cheap foreign exchange rates, as well as the obligatory shiny app.
Not only are the digital banks proliferating and expanding but their services are mushrooming too. Monzo, a UK fintech that started by offering a pre-paid debit card, then a current account, this week moved into short-term loans. Revolut two weeks ago launched commission-free share trading in the UK.
Square's Cash app has overtaken PayPal's Venmo as the trendy way for Americans to transfer money to each other. According to research company eMarketer, the two apps combined are used in more peer-to-peer transfers in the US than Zelle, the big banks' own money transfer platform.
Banks are well aware that they are falling behind. At a recent breakfast of executives from traditional lenders in London, someone asked how many had a Revolut card: more than half the room raised a guilty hand.
There is little particularly revolutionary in most of the challengers' technology. But like the analogue film manufacturers who had the ability to switch to digital but failed to invest, the banks seem to be having their Kodak moment.
Last week JPMorgan Chase did come up with something that was genuinely compelling. The largest US bank, which is closing a credit card business in Canada, simply wiped the balances of remaining customers.
"It's kind of like I'm being rewarded for my irresponsibility," a 24-year-old university student cheerfully told the Canadian Broadcasting Corporation, as Dimon relieved her of a C$1,300 (US$977) debt.
But it is hardly a sustainable perk — and it shows the largest US bank on the retreat. It also offers another opportunity for the insurgents, fuelled with billions in venture capital funding, to take on the lumbering incumbents.
The battle is far from over. The embarrassing fact for the entire fintech industry is that it has failed to take significant share of core banking activities despite a decade of a benign credit environment with banks hampered by their recovery efforts after the 2008 crisis.
Many of the newcomers are plagued by poor customer service and attract the attention of regulators for weak controls. As the cycle finally turns, there will be more serious casualties and perhaps an opportunity for traditional banks to eat up some of the new companies at more appetising prices.
Written by: Tom Braithwaite
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