It’s a familiar story… Big established players who have dominated the market for years risk losing market share and profits to new challenger organisations. Those new players, operating without legacy infrastructure and focusing on their core market, are quick to meet their customer needs while delivering innovation and value. The sector is coming under increased scrutiny from regulators.
But this time it’s meat and veg not mortgages – the big supermarkets have taken the place of the big banks, but many of the surrounding circumstances are the same.
One supermarket boss recently said the market had changed more in the last three months than it had in the last 30 years. I don’t believe the financial services sector has changed quite as dramatically in a few months, but the development in the market structure post crash has been equally evident. But I do believe it is down to the same factor: a challenge to the norm with organisations winning by doing it better and giving the customer what they want at a price they like.
In our market, the first mover opportunity for the challenger banks was to fill the supply void, created when the major established players could not meet the levels of demand due to their funding supply being restricted.
But they continued to outperform in terms of messaging, product innovation and delivery, and as a result have gained market share. The common theme that runs through both sectors is that customers respond when you give them products and services that they want, as opposed to giving them what suits you as the provider.
So there are more similarities than you would think between emerging supermarkets and new or online banks. Challenging the perceived market norm will shake up all players, established and new, and that has to be fantastic news for the consumer, leading to increased competition, greater choice and better value.
Long may it continue.