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USA Challengers VS High Street VS Credit Unions: The Real Picture Through FinTech Insights

With Challenger banks being a constant source of transformation within the space, often high street banks are left in their wake, having to innovate in order to keep up. 

Here, Scientia, a financial consulting firm, have drawn data from its digital banking research platform, FinTech Insights, to compare challengers banks to their competitors high street banks and credit unions, to understand how these organisations serve customer needs. 

With April being Challenger month at The Fintechs Times, Scientia as a digital banking consulting firm felt compelled to participate. Challengers have been a steady force of innovation for the last few years offering more and more digital capabilities to their customers. However, we’ve realised that many digital banking teams have trouble examining how their competitors differ from them and where. They lack actionable data that allow them to have an overview of their competition and spot opportunities and gaps in their market.

Drawing data from our digital banking research platform, FinTech Insights – which analyses and evaluates the UX of Banks and Fintechs – we’ll examine how Challengers measure against their US competitors. We’ll look at the total digital banking features offered by Challengers, High Street banks and Credit Unions. This will be followed by a 3-scenario analysis to deepen our understanding of which of these banks serve their customers immediate needs and how.

Out of our extensive pool of analysed banks from the US and European market, we have, for impartiality, randomly selected the following banks:

  • Challenger: SoFi, Revolut, Dave, Current, Ally
  • High Street: PNC, Bank of America, Chase, Capital One, TD bank
  • Credit Union: Alliant Credit Union, Affinity Plus Credit Union

Which digital banking iOS application offers most features?

Digital banking features ranking of the randomly selected Challengers, High Street Banks and Credit Unions

As can be seen, there is a clear lead in the number of features offered in the iOS channel: Revolut. The EU-based Challenger offers almost double the number of features, 388, from the next in line bank, Bank of America with 218. The Affinity Plus and Alliant Credit Unions fare slightly better than High Street TD bank and Challengers Current and Dave are equally equipped as Capital One.

The average number of digital features of Challenger banks is calculated at 203, while for High Street banks the number is 162. Challengers are slightly ahead of their competitors but, does this place them in a more favourable position overall? 

The quantity of digital offering is only a part that concerns customers. What truly captivates customers is how convenient the user experience is for them. To understand that we will dig deeper by examining them through 3 scenarios in the iOS channel: digital onboarding, open a savings account and set a recurring payment and buy Bitcoin.

Scenarios

Scenario 1: I want to open a digital bank account

The best UX-calculated journeys for digital onboarding are designed by two Challenger banks, SoFi and Dave with 244 and 257 respectively out of 1000. FinTech Insights measures the UX of user journeys using the Perfect 1000 system where the highest mark a bank can receive for a user journey is 1000. Both banks provide a convenient journey where customers have to complete a 34-step process for Sofi and 35-step one for Dave.

On the other hand, Alliant CU presents the least customer-friendly KYC with a score of -2237. This can be attributed to the process being quite lengthy with 129 steps required for customers to complete this process.

With the average KYC being -685 it stands to say that SoFi and Dave have done an exceptional job in creating a process that is very user-friendly. The same, unfortunately, can’t be said for Alliant  Credit Union which scores quite below the average.

Scenario 2: I want to open a savings account instantly and want to save $50 every month. 

 Flowchart of SoFi’s Open a Savings Account user journey

Flowchart of SoFi’s Open a Savings Account user journey

The banks that offer this digital offering are High Street banks PNC, Chase, Capital One, TD bank and Challengers SoFi, Revolut, Current and Ally. Of the two CU, only Affinity Credit Union’s customers can open a savings account and set a recurring payment.

Both Current and SoFi offer high-scoring UX journeys with 802 and 810 each. In both Challengers, the journeys are quick with 26 steps for SoFi and 23 steps for Current to complete the journey.

The bank that offers the least convenient user journey for opening a savings account and setting a $50 recurring payment is PNC. The bank scores 297 out of 1000 and requires its customers to follow 56 steps in order to complete the process.

Scenario 3: I want to buy Bitcoin

FinTech Insight data showed that of the 12 banks and Credit Unions included in this article only two Challenges provided a user journey for this scenario: Revolut and SoFI.

Not only do these banks offer user journeys while their competitors don’t, but they offer them with great UX. Revolut’s user journey is evaluated at 696 and takes 25 steps to be completed. SoFi customers need only follow a 25-step process which is calculated to 751.

There are undeniable benefits for introducing wealth management features into a bank’s digital banking portfolio for their customers. It’s clear that these Challenger banks have understood that, incorporated them into their arsenal and simplified customer access to cryptocurrencies.

The US digital banking landscape

Our initial features ranking illustrated a slight edge in the number of digital offerings provided by Challengers over High Street and Credit unions. The same can be seen in their UX evaluation. Challenger banks take the top spots with best-evaluated user journeys with SoFi acquiring the top honour in all 3 scenarios. At the same time, SoFi and Revolut are shown to be excellent listeners of customer needs, integrating investment capabilities at a time when cryptocurrencies are heading towards becoming mainstream. 

High Street banks where they offer user journeys they do so in a less customer-optimized user journey. Credit Unions are positioned last with the least number of digital offerings – provided user journeys for only 1 scenario – through not entirely UX friendly processes for their customers. High Street banks and Credit Unions need to react fast and understand how they can close this forming gap with Challengers and offer their customers the experiences that they truly desire. 

Imagine what you could do if you had all of your competitors exhaustively analysed, across all channels, and the best practices around the world. FinTech Insights analysed all USA High-Street Banks, Challengers, Fintechs and Credit Unions, including more than 200,000 user journeys UX-analysed and captured in video. 

Explore FinTech Insights and discover its benefits for your team. 

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