The UK launch of a Web 2.0 and social media-based bank in the UK is imminent as Germany’s Fidor Bank applies for a UK banking licence.
Fidor Bank, which currently operates in Germany and Russia, is also planning to launch in the US.
The bank uses social media to overcome the cost and complexity of traditional banking, while increasing customer trust through an online community.
Financial Services Club chairman Chris Skinner said Fidor Bank is growing in Germany. “It seems to be doing pretty well in Germany in terms of growth, although it is still insignificant compared to traditional banks,” he said.
“It could appeal to customers because it’s cool and funky, which are not words I would normally associate with banks,” Skinner added.
Fidor is the brainchild of a group of entrepreneurs who recognised that because Web 2.0 and social media were changing people’s social lives, they would inevitably change retail banking too.
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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.
The bank has now announced plans to expand in the US, and revealed that the UK launch is in its final stages.
On the US launch, Kroener said: “For Fidor Bank, this project is an outstanding opportunity and a further step in the global roll-out of the Fidor brand and Fidor vision. Even though the US is the motherland of all innovative digital developments, we see some striking market opportunities for a consumer-centric banking philosophy and product.”
Following the completion of the UK and US launches, the bank stated it will take steps to make its services available throughout the Eurozone, as many countries are interested in innovative banking ideas.
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
Matthias Kroner, Fidor Bank
“We have frequent requests from all over Europe,” said Kroener. “The web is not only an enabler, but also calls for international development.”
At a Financial Services Club meeting in 2013, which Computer weekly attended, Kroner said the group looked at how social media and Web 2.0 was changing people’s lives and came to the conclusion that it would also change retail banking.
He said the unanticipated financial crisis that arrived in 2008 provided a unique opportunity for Fidor Bank. The timing of the bank’s creation was more to do with the momentum of Web 2.0 technologies and the advent of social media, but by coincidence it arrived at a time when people were more likely to consider switching banks.
“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,” said Kroner.