Retail banks VS challenger banks: how can data level the playing field?

Banks have been seeing a new batch of ‘digital’ challenger banks entering the ring, offering digital services that retail banks are having to work hard to compete with…

Retail Banks

Banks have been taking note over the years as a new batch of ‘digital’ challenger banks (including Starling, Monzo and Monese to name a few) have been entering the ring. These challengers are leaning into digital transformation, introducing features like easy bill splitting, budgeting interfaces and flexible accounts in a bid to change the market forever.

It’s no wonder an increasing number of people are heading into their corner. Leading challenger bank Revolut has 14.5 million personal customers at the end of 2020, showing that even if the established banks still have the majority, demand is steadily growing for a new type of banking experience.

In a world where customers demand to be able to open a new bank account, apply for a mortgage or switch their provider instantly, traditional retail banks need to adapt to the new normal, or else they might find themselves on the ropes. But to do this, they need to solve their data challenges, whether that’s fragmented customer data across different business units or inaccurate data in legacy systems.

An integrated data strategy – one based on consolidating customer data into a single source of truth - can help established retail banks re-evaluate their data estate and bring them back into the fight, helping them to target customers with personalised options, faster services and an all-round better banking experience. But how?

DING DING DING! Let’s get ready for a royal data rumble.

Round 1: Data siloes VS a 360-degree view of your customers

Retail banks often have disparate data touchpoints feeding into their company, meaning data is segregated into siloes that aren’t connected to one another.

For example, mortgage handlers may have access to property values, while wealth managers can see a customer’s net worth – but there’s no integrated source of data to join them together. This could mean you could end up pitching offers and special rates to customers that just aren’t relevant (a customer with a high-value property, for example, isn’t interested in offers or accounts suited to first-time buyers) but how can you target consumers effectively without having a full picture of that consumer through their data?

Hand Money Crop

This silo-ing of data could be down to any number of reasons. It could be because banks want to protect customer privacy and avoid hefty fines for breaking the rules. It might be because they have legacy systems that trillions of dollars pass through every day, making every change a pretty significant (not to mention high-risk) feat. Or it could be down to poor data governance and a lack of a single, central repository for their data.

The more disparate the data sources, the harder it is to get a 360-degree view of the customer. This makes it more difficult for banks to connect with their customers. After all, once someone’s received a ‘personalised’ mortgage offer for the fifth time with no intention of buying, you wouldn’t blame them for thinking their bank might not be right for them.

If instead of storing data in siloes, banks can combine this data to get a comprehensive view of each individual customer (e.g. their age, their lifestyle, their interests and the stage they are at in life), they’ll be in a much better position to offer personalised services, nurture customer relations and build trust. It’ll not only allow them to compete more effectively with new challenger banks, but explore innovative and exclusive services that younger banks can’t offer.

End of Round 1: Traditional banks can give themselves the edge over challengers with a centralised, single source of data.

Round 2: Run-of-the-mill banking VS a memorable customer experience

Retail banks need to find ways to retain their customers so that they don’t flock to glossy, new contenders – but to do this they need to find ways to appeal to customers ready to make the jump. The only way to do that is to have a strong, clear view of customer data that facilitates deeper analysis and targeted marketing.

Mobile Banking Crop

Part of the appeal of challenger banks in the UK has been taking a more focused approach to target specific customer needs. Monese and Monzo, for example, both offer highly capable mobile apps that give enhanced budgeting options, while ClearBank has set itself apart by being the only clearing bank in the UK that does not offer retail banking services.

Retail banks need to use data to segment their customers and offer them the best possible products and services to match their personal experience. If a customer feels like their wants and needs are being catered for, they’ll be much less inclined to jump ship to a challenger bank.

End of Round 2: By using data to find their customers’ weakness, retail banks can land a winning punch on challengers.

Round 3: Going it alone VS a data governance solution you can trust

According to a Gartner report, 80% of heritage financial services firms could struggle to remain relevant by 2030 as digital platforms, FinTechs and non-traditional challengers gain greater market share.

If traditional retail banks want to survive, they need to get a handle on their data so that they can nurture customer relationships, retain loyal customers and attract new ones. And in this respect, Comma is well placed to tip the odds in your favour.

Comma’s master data management financial solution cleans, validates and integrates your data to create one seamless point of reference for all your critical information. We help banks to take control and leverage their data, ensuring it is harmonised across departments, instead of divvied up into silos.


So, if disparate data sources and expensive legacy tech is making you think about throwing in the towel, get in touch today. Comma will get you match-ready with a single, authoritative view of business-critical data across your organisation, providing insightful, actionable and clean data.

Don’t head into the coming bout with challenger banks without a seasoned trainer at your side. From MDM to data governance, quality and migration solutions, Comma has extensive expertise you can rely on. Get in touch by calling +44 1926 911820 or head to our contact page.