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Fidor Bank is the latest challenger financial services firm to start operations in the UK after the German company announced its UK launch.
The bank – which applied for a banking licence in the UK in January – also plans to operate in the US.
In 2007, CEO Matthias Kroner and his colleagues applied to the Federal Financial Supervisory Authority BaFin for a banking licence in Germany. Fidor Bank was born soon after.
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Fidor uses social media to overcome the cost and complexity of traditional banking, while increasing customer trust through an online community.
The bank has made a profit in its last two years, the fourth and fifth of its existence. It has an open-technology platform it developed itself, which can be plugged into through APIs. For example, as a result of open APIs, its current account customers can access 25 different services and can, for example, deal in foreign currencies and precious metals with the same current account.
The bank’s CEO Kroner said it will start with the minimum product offering, because it wants to listen to the demands of the community before it rolls out more services.
Kroner said that, in the past, the financial crisis that arrived in 2008 provided a unique opportunity for Fidor Bank.
“We were born at a time when trust in banking was going down to zero – so we thought, if not now, when? Web 2.0 gave us the chance to set up a new bank, then the financial crisis and the behaviour of the banks involved said to us that setting up a new bank was a must.”
Fidor is the latest in a growing list of banks and finance firms in the UK using the latest technology to take advantage of changing cultural attitudes to banking driven by online, mobile and social trends.
Read more about financial services challengers
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Atom Bank has been granted a banking licence by the Bank of England and is set to launch later in 2015.
The UK could be on the cusp of dramatic changes in retail banking following the launch of a current account comparison service.
Challenger bank Lintel Bank has applied for a UK banking licence with plans to join a growing group of banks taking on the high street incumbents.
Earlier this year Financial Services Club chairman Chris Skinner said Fidor seems to be doing well in Germany in growth, although it is still insignificant compared to traditional banks.
“It could appeal to customers because it’s cool and funky, which are not words I would normally associate with banks,” he said.