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The Services Family, a challenger bank that targets the military community, has outsourced its digital activities to France-based Sopra Steria.
The bank was set up by two military veterans to cater for the banking needs of armed forces personnel, veterans and their families – a highly mobile group of people who struggle to gain access to full banking services.
With modern technology The Services Family hopes to design a bank that fits the lives of this group.
“It was essential for us to choose the right partner due to the digital nature of The Services Family bank. We require extremely sophisticated digital services that can adapt to the changing needs of our target customer base,” said Michael Jenkins, founding director of The Services Family.
With the UK reducing the regulatory burden for bank startups, newcomers have emerged that target niche groups with appropriate products and services. This contrasts with the traditional full-service banks on the high street.
Part of the appeal of these challenger banks lies in their ability to invest in the latest technologies without being held back by the burden of legacy technologies.
The Services Family has chosen to outsource its operations to Sopra Steria, whose software will provide end-to-end banking services with a single partner. Sopra Steria will also offer the bank help with regulatory compliance as it seeks to gain a full banking licence.
Modern technology and outsourcing can give new banks a cost advantage and enable them to launch new products and services quickly. Another challenger bank is OakNorth, which targets lending at high-growth small and medium-sized enterprises (SMEs), and is putting its core systems in Amazon Web Services (AWS).
OakNorth was awarded its UK banking licence in March 2015. It hopes to differentiate itself through technology and by allowing SMEs to secure loans through assets other than property. Its move to the cloud came in May, some eight months after its launch, and will help it scale with fast-growing demand.