Technology and Startups

Next Generation Banking Startups

Banking giants of Europe can no longer work in the business as usual mode. A new generation of smart banks are readying their war chests and honing their AI’s to usher in a financial revolution. Many of these banks neither have a physical branch or an ATM network; they exist only in the digital realm as Mobile Apps.

These contemporary banks have leveraged technologies like contact-less payments, real-time financial monitoring and artificial intelligence to offer a plethora of services. They seek to serve as an open platform through which different providers can compete to offer financial products to their customer base.

bibox

BiBox is changing how banks collaborate with fintech startups in Europe.

In the UK, these new banks are referred to as Challenger banks. The products launched by these banks have already found favor with the millennial generation who detest the customer service offered by older banks. Many of these banks also claim that they are bringing in much needed innovation to financial products that have atrophied over decades. It is however too early to judge them on those parameters.

To support them in these initiatives, the UK government has proposed to launch a £ 750 million (Rs 6,500 Crore) fund that will help new banks launch products for businesses. Once Open Banking standards are implemented in 2018, the Competition and Markets Authority (CMA) estimates that UK businesses will save between £ 92 to £ 180 annually in banking charges. These savings will mainly accrue to overdraft and current account holders.

We have compiled a list of some of these new award winning banks in Europe below:

European banks

Bitwala – www.bitwala.com

Bitwala enables you to hold any currency you want in your global bank account. It has tied up with VISA which enables you to withdraw cash from any ATM and at shops where VISA cards are used. It also claims to effect the fastest money transfer to any country at a fraction of the cost charged by giants like Western Union.

Opening an account at Bitwala takes less than minute and you will get a free bitcoin wallet. It is also one of the few banks that allows you to pay bills through Bitcoin. If you own Bitcoins you can load them on to it’s debit card and then withdraw cash from an ATM anywhere in the world.

pound notes coins

Compte Nickel – compte-nickel.fr

At this new tech bank, you can open a current account in less than ten minutes by visiting any one of it’s outlets located at tobacco shops across France. By paying a fee of € 20 annually you can also get an International MasterCard and an IBAN number. When the company launched in 2014, they were acquiring more than 25,000 customers every month.

The french banking giant BNP Paribas was so impressed with this fin-tech firm, that in April 2017 it acquired the firm at a huge premium. The acquisition price has not been made public. The new fintech bank is now aiming at acquiring 2 million customers by 2020 and claims to be opening a bank account every 30 seconds in Europe. It will continue to remain a separate entity but is wholly owned by the Spanish banking giant BNP Paribas.

Readers must note that a bank account opened in Europe is worth more than a hundred Jan Dhan Accounts opened in India. This is because in India close to thirty percent of the bank accounts continue to have zero balance and marginal activity in the majority of them.

railsbank

Railbank helps small banks connect to any global banking platform.

IBANFirst – www.ibanfirst.com

Founded in 2013 as a Forex payments company, the company pivoted in August 2016 to offer an online multi-currency platform. It serves as an alternative to banks for small and medium enterprises in France. The company operates on a Banking-As-A-Service model which allows entrepreneurs access to tech which allows them to focus on their business instead of worrying about bank charges. You can generate as many iBanFirst virtual cards as you want to meet the obligations of your business. The company currently offers two types of business accounts: International Business Account and Euro Business Account.

Kontist – kontist.com

A bank account for freelancers, this next generation bank is based in Germany. Freelancers can open a business bank account at Kontist to benefit from easy tools to manage taxes and VAT. The company was among the first in Germany to enable freelancers to automate their tax compliance and VAT. All this can be done with just one click once you login.

The firms basic account is free and can be used for business purposes and tax compliance. If you require a contactless debit card added to your account you will need to pay a monthly fee. Since it started operations in 2013, the company has effected transfers worth more than € 1 billion.

remittances

Global remittances are still expensive as the map above shows.

Lootloot.io

Built as a banking service for millennials the company combines a prepaid product with a smart banking mobile app. Users also get to use a contact-less Loot MasterCard which offers insights into their expenses and personalized recommendations on how to save money. You can make payments while abroad using the live foreign exchange rate with no added fees. This facility is available in more than 210 countries. Setting up an account at Loot takes less than eight minutes and you can deposit cash in more than 100 different currencies.

Lunar Way – lunarway.com

Among the next generation of challenger banks, Lunar Way has collaborated with multiple banks to offer customized products for its users. When you open an account with Lunar Way, the company partners with a local bank to ensure your account is opened in your regulatory jurisdiction.  Their service is available on the mobile and web. The startup recently won awards for it’s UX design. Lunar Way is not a bank but rather an intermediary that offers banking services by partnering with established banks.

zeroflows

Zeroflows – An information platform to invest in low volume equity markets around the globe.

Qonto – qonto.eu

You can open an account under five minutes at Qonto with a fully functional MasterCard. Qonto is for entrepreneurs and freelancers who do not want to get bogged down with paperwork and red tape. Unlike other banks the money deposited in your account is safe because it supervised by the Banque de France. You can use your virtual MasterCard to make payments immediately without having to worry about exorbitant payment charges. Qonto is compatible with a host of cloud based services like Stripe, Quick-books, Slack and PayPal.

Tink App – www.tinkapp.com

This mobile app allows you to access all your bank accounts and credit cards in a single place. You can then pay bills and make transfers within bank accounts through their mobile app. The company which is based in Sweden helps you find the best savings interest rate by comparing offerings from dozens of banks. It also offers a built in personal finance manager which auto-categorizes all your expenses.

The app also is useful to compare mortgages offered by different banks and then seamlessly transfer your existing mortgage. The company is open to partnerships with existing banks to develop new products.

women smiling

Akshay Patel, Founder of AI based payment processing firm Paymentology with employees at London FinTech Week.

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