FinTech Magazine - May 2022 | Page 89

PAYMENT SOLUTIONS
KPMG UK , told us : “ There is a perception among many consumers that traditional banks do not offer the smooth customer experience or customer service that challenger and neo banks provide . Traditional banks are investing millions on technology with the objective of defeating these stereotypes , promoting brand loyalty from their existing customers and being able to secure new customers . They are extending their customer offerings into areas such as purchase protection , loyalty rewards and support with credit scoring .”
And , while challenger and neo banks have grown their audiences significantly in recent years , many are still struggling to claw themselves into profitability .
“ Digital banks face an uphill battle of getting their existing customer base to expand into new products ,” says Paula Smith ,
Partner and Head of Banking and Capital Markets at KPMG UK . “ Newer banks have built up large customer bases by offering innovative apps and features linked to current accounts , but they are not converting those customers in significant numbers into mortgage or investment products where they can actually generate profit . Ultimately , profit generation will be required to meet investors ’ valuation expectations .”