Challenger banks are small retail banks competing with older banks. The concept has entered our lives in recent years, has become increasingly popular and creates serious competition threats for old banks. Many of these banks don’t have branches. Still, they achieved customer satisfaction with their solutions. They save a lot of cost by not having a branch and allows them to provide more affordable services. The most important feature of Challenger banks is using new financial technology and avoid irrelevant cost. Customers of Challenger banks can perform all their transactions through digital channels without going to branches.
The most important advantage of Challenger banks is that they have their own banking licenses. Challenger banks can provide traditional banking services to its customers through more flexible and cost-effectively with their license. It is expected that the demand for Challenger banks will increase in the following years due to these services. The number of Challenger banks will also increase.
Challenger Banks under Financial Crime Threats
While Challenger banks want to keep customer experience and customer satisfaction at the top, they face some risks. Challenger banks’ inexperience against financial crimes during their establishment made it easier for criminals to commit crimes such as money laundering, corruption and bribery through challenger banks. Criminals have created new crime channels by abusing the fast and digital services provided by Challenger banks.