Scarlett Sieber, managing director and chief strategy & innovation officer of CCG Catalyst, spoke at the Seamless Middle East conference earlier this year. Later, she caught up with Seamless TV to discuss a wide array of fintech and banking topics, as seen in the video below.
Sieber first discusses the state of neobanks today. This is an area in which she has deep firsthand knowledge, having worked with Simple, the first U.S. neobank, in her time at BBVA, which acquired Simple for $117 million in 2014. A global bank acquiring the flagship challenger bank in the U.S. was an event that rocked the U.S. fintech to its core.
Challenger banks have enjoyed far greater success in the U.K., due to a combination of regulatory friendliness and consumer appetite, but when these banks arrive in the U.S. they don’t get the same reception as the Beatles did. Instead, they face a more complicated regulatory landscape that makes getting a national charter daunting. Two U.S. challenger banks, Grasshopper in New York and Varo in San Francisco, have succeeded in this effort. (Varo received preliminary approval for a charter in June, while Grasshopper was officially awarded its charter in May.)
U.K-based neobanks such as Monzo, N26 and Revolut have chosen instead to partner with U.S. banks. There is a class of fintech-friendly banks such as Sutton Bank, Cross River Bank, NBKC, and others that have braved the regulatory waters necessary to swim with fintechs.
If your bank is interested in learning how this is done, please contact CCG Catalyst and we can provide you with more information.
Sieber also discussed the growig role of mobile banking in the U.S. Products such as the Apple Card, issued by Goldman Sachs on the Mastercard network, drive usage of the Apple Wallet through extensive rewards to staying in the Apple ecosystem. (The most successful mobile payments app of all, from Starbucks, is built entirely on loyalty and rewards.)
Mobile banking may bring to mind the largest banks in the country, which tend to have the most sophisticated and feature-rich apps, but customers of rural banks, who face long drives to branches, are actually in need of superior mobile experiences, as CCG Catalyst CEO Paul Schaus pointed out in a recent article.
Customers of smaller banks should watch how their customers are using the new breed of products like the Apple Card. As Sieber says in the video, “Someone with the brand power of Apple, who can help to really lower the customer acquisition cost, will have enough impact to actually increase mobile wallet usage. Because, in many places in the world, mobile wallet usage is still quite low.”
Sieber also discusses the role of government and regulatory bodies, and not in the negative way often heard in banking circles. On the contrary, U.S. regulators are becoming more accommodating to bank-fintech collaboration. As relationships between banks and fintechs become deeper and more complex, government “definitely needs to be involved,” Sieber said.
To listen to the interview and hear more from Sieber, please watch the video below. And if your institution is interested in discussing any of these topics with CCG Catalyst, please reach out!