The latest challenger is digital bank Tandem
Digital bank Tandem is expected to join the ranks of challenger banks that are taking on bigger high street lenders next week.
Tandem is set to be unveiled by tech investor and co-founder of digital money transfer service Azimo, Ricky Knox, the FT first reported. The challenger will have mobile and digital channels, as well as a contact centre.
"Mobile is already the dominant mode of interaction for people with their banks but utterly underused since it opens up the opportunity for a money dialogue. However, we are not aiming to be a niche mobile only bank," Knox told City PM
Tandem believes its main competitors will be the big highstreet banks such as HSBC, Barclays, RBS, Santander and Lloyds. Challenger banks are tempting customers away from these with better products and customer service, albeit with mixed results.
Challenger banks are currently contending with Chancellor George Osborne's plans to gradually reduce the bank levy rate over the next six years from 0.21 per cent to 0.1 per cent, while introducing a new tax on the entire sector, which could stifle their growth.
Knok told City PM that while customer projections for the first six to 12 months were "conservative" it has some "secret strategies up our sleeve".
"More on that later," he said.