Tandem, one of a handful of the UK’s digital challenger banks hoping to give the big four a run for their money is opening its doors for business, City A.M. can exclusively reveal.
The Tandem mobile banking app will begin rolling out from today to those who have already signed up, with ambitious plans to make it available to the public in the early part of next year.
The startup will launch the app in waves to 10,000 early adopters, known as co-founders, as its seeks feedback to improve its service and move quickly toward a full roll-out.
Users will initially be able to add any existing UK bank account to it. They can then monitor their spending and will receive suggestions as to how they can save money, stashing their Tandem's own savings account, its first financial product.
The bank believes the app will better help users manage their money and Tandem's own current account, loans and credit cards will also soon follow.
Features will include suggesting where users can save money on their bills by switching energy provider. With access to transaction information, another feature also includes asking whether recurring subscriptions are still being used so they can be cancelled if no longer necessary.
While apps for budgeting are common, Tandem's chief customer officer Ruth Handcock told City A.M. Tandem's app is designed to engage users with their finances and encourage them to take action, with the goal of changing behaviour and habits rather than simply showing people where their money goes.
The two-year-old bank has been crowdsourcing the app with ideas and feedback from co-founders since gaining a banking license at the end of last year.
“2016 has been a phenomenal year for us. We have been working hard to prioritise the real-life needs customers have, and provide smart, practical solutions," said founder and deputy chief executive Ricky Knox.
This is the first step for us in what will be a great journey. As we grow into a full-service bank in 2017, we will continually listen to the needs of our customers and help them have a better life with their money.
While the challenger bank is one of several turning its back on traditional high street branches to bring banking into the digital world, it will set up a call centre to provide customer support.
Tandem is one of several digital challenger banks to spring up in the fintech boom of recent years which has attracted high profile investors.
It has raised £22m from top venture capitalists such as eBay founder Pierre Omidyar's Omidyar Network and Route 66 Ventures. It also smashed its £1m target within minutes in a crowdfunding campaign which let co-founders own a share of the bank.
Neil Woodford-backed digital challenger Atom launched fully in October after an initial invite only launch in April. Monzo was granted its banking license in August with imminent plans to launch a current account in the coming months. It already boasts more than 30,000 beta users of a pre-paid debit card, which has been used as a way of testing among customers and as a marketing tool to promote the brand. It has said it will have only a current account rather than offering a range of products.
Fidor, a German digital challenger acquired by French bank BPCE and which also crowdsources products and features from users, launched in the UK last year while N26, also from Germany, plans to launch in the UK after landing approval for a European banking license from the regulator Bafin.
Established banks have attempted to follow in their innovative footsteps, turning to technology with apps, using biometrics such as fingerprints for security, and video banking.
Many have identified a move to online banking as a cost cutting measure allowing them to cut back branch numbers across the country. However, the upstarts are hailing a more fundamental reinvention of banking from the bottom up, starting with the customer.
The completion watchdog has pushed to shake up the banking sector in its major review of retail banking, encouraging such challenger banks and pushing traditional financial institutions to become more innovative to offer consumers greater choice.
An influential group of MPs this week said the report did not go far enough, giving challengers another favourable hand in their efforts to disrupt the established players.