Covid Crisis Could Mark the End of Challenger Banks

Challenger banks have become one of the hottest trends in fintech with companies raising hundreds of millions of dollars all over the globe; the onset of the current crisis has forced traditional banks into an all digital mode which could spell big trouble for the challenger market; in his weekly Forbes column Accenture’s Alan McIntyre points out that app downloads for European challengers has fallen off a cliff and VC funding has dried up; in 2019 Accenture’s ACN research found that 12 percent of traditional banks truly embraced digital with 38 percent working towards embracing digital; the current crisis has allowed banks to catch-up quickly, almost all traditional banks were forced to go mostly digital with branches being closed; access to credit is something not all challengers have and it is something customers have indicated they will need to help them bridge the gap; banks have always been wary of fraud when moving to all digital, now that they are forced to move they will also need to address their fraud concerns; while the lockdown part of the crisis might last only a few more months it could end of having a lasting impact on the challenger bank market.  Forbes

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