Burnmark has analysed 200+ challenger banks to place them on a quadrant showcasing their unique skills and strengths. To subscribe, please write to info@burnmark.com.

1. The Challenger Banking Quadrant
Q1 2019
Pioneering
MARKETSTRENGTH,GROWTHPOTENTIAL
Transformative
Embryonic
PRODUCT INNOVATION, BRAND MOMENTUM
Meteoric

2. Product Innovation and Brand Momentum (x-axis)
Customer acquisition
(Customer base, customer base growth
rate, transaction volume)
Partner ecosystem
(Number of technology partners, number of
business partners)
Investments
(Total funding, latest funding, investor
quality)
Social media performance
(Twitter response time, followers on
twitter, Facebook, Instagram, and LinkedIn)
Mobile app performance
(App store ratings, monthly downloads,
download growth, app features)
Financial performance
(Revenue, profit)
Technology initiatives
(AI tools, blockchain, data analytics)
Market Strength and Growth Potential (y-axis)
Product offerings and onboarding
(Number of products, customer onboarding
process)
Banking license
(Type of license, year of license,
geographies)
API Initiatives
(API integrations, API offered, API
partners)
Partnerships quality
(Business partners, technology partners)
Hiring plans
(Time since launch, number of employees,
future hiring plans)
Expansion plans
(Geography expansion, product line
expansion)
Awards and recognition The team
Data points used

3. Top 10 to watch out for
Xinja Bank, launched in
2017, has raised AUD 2.4mn
with a crowdfunding round
and already has an Australian
credit license.
Arival is the first digital
bank for small businesses,
GIGs and crypto-related SMEs
operating under a US-based
banking license.
Digital SME Bank Allica
(previously CivilisedBank), has
resubmitted its banking licence
application to the Bank of
England in Nov’18.
Coconut, a provider of current
account for freelancers, and small
business owners, has recently
raised GBP 1.3mn in equity
crowdfunding.
BABB is building a decentralized
banking platform and has raised
$20mn in a token sale in Feb ’18
and GBP 1.4mn in an equity
crowd-sale in Aug ’18.
Qonto provides a banking
alternative for freelancers,
startups and SMEs and has
raised $36.1mn so far, the latest
being $23mn in Sept ’18 .
Holvi, a digital banking
service for freelancers and
entrepreneurs, was acquired by
BBVA in 2016 and is currently
conducting a pilot program to
launch in the UK.
Loot offers a digital current
account and contactless prepaid
card aimed at students and
millennials. In Jan ’19 RBS has
invested GBP 2mn to take a
25% stake in Loot.
Penta is building a platform
connecting the best financial
services to the bank account in
partnership with solarisBank and
has raised EUR 9.2mn in funding.
Moneemint (previously Ummah
Finance), aimed at millennials in the
UK and Europe, is built on the
foundations of socially responsible
Islamic banking and is in the process
of applying for a UK banking license.

4. § Burnmark has a list of 200+ challenger banks that is regularly
kept track of and data updated every quarter
Some examples of banks we cover are..

6. To receive monthly insight on challenger banks, their
market movements, and new players in the space,
please reach out to info@burnmark.com to become a
client.

7. The Fine Print
• Burnmark defines Challenger Banks as technology-driven and customer-centric financial institutions who rely purely on digital channels for their customer onboarding and
servicing, such as apps, chatbots or websites. Several challenger banks are clustered around markets like the UK, EU and the US. For this quadrant, we have considered 3 kinds
of challenger banks:
• Digital subsidiaries of incumbents: There are
the companies that are spun off from incumbent banks
as their digital subsidiaries with a separate brand.
Examples are Hello Bank by BNP Paribas, Digibank by
DBS, Pepper by Bank Leumi, etc.
• The report does not include the banks that have received their licenses or were launched since Q2 2018, as it would be too early to analyse their strengths and market potential,
which means we did not include some interesting ones like Zopa (UK), Varo Money (US), Finn (US) and Bo (UK).
• The report does not include single service organizations who only offer, or plan to offer, a payments-related product like mobile wallets or credit card or only loan products.
• The analysis of the challenger banks in the quadrant is based on the data captured till December 2018.
Methodology
• Burnmark conducted initial research to identify 200+ challenger banks active across the UK, continental Europe, USA, Asia, Australia and Latin America. We did an initial
comparative analysis of 150+ challenger banks to shortlist the top 30 challenger banks who have shown a strong performance across various parameters as mentioned above.
• Data was collected from primary sources such as the bank’s website, self-published blogs, annual reports, social media accounts, app store reviews, etc. Additional supporting
data was collected from secondary sources such as crunchbase.com, craft.co, bankingtech.com, finextra.com, Financial Times, sifter.com, LinkedIn etc. We also took
qualitative feedback from key stakeholders in the market.
• For standardization of analysis, quantitative parameters such as customer base of banks and growth of customer base were normalised to a monthly basis and funding
amounts were normalised to USD. In case of digital subsidiaries of incumbents, for certain parameters, we used proportionate data from parent firms.
• Pure play challenger banks: These challenger
banks seek to become a one-stop-shop bank from the
outset, but without branch-based distribution channels and
set up as mobile banks with a banking license. Examples
are Starling, Monzo, Tandem, Atom, N26, etc.
• Relationship-only challenger banks: This model
involves challenger banks that have no banking license and
only offer customers a front-end service, in partnership with
traditional bank to use their backend infrastructure or banking
license or both. Examples are Simple, Moven, etc.

8. Disrupting market research, data by data.
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