How Challenging Has 2020 Been For The Challengers?

The pandemic has changed the way most of us work, hang out with friends, shop and, for many, it has changed the way we think about money. Today, we’re going to look at some of the most well-known challenger banks and see how they’re dealing with the crisis. Following that, we’ll dish up the most important trading events for your calendar this week.

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A shift in thinking for traditional banks

Over the past few months, governments around the world have enforced lockdowns and advised citizens to socially distance and avoid all non-essential travel. ‘Physical shopping’ is now rarer and when people do pay in-person, they’re more likely to use a cashless payment method, with the use of contactless cards, phones or smartwatches to pay for things on the rise.

According to a recent survey, 78% of Americans are concerned about going to their local bank. And it’s not just Americans. Because of a combination of all of these factors, traditional banks all over the world are coming under increased pressure to ‘go-digital’.

Digital banking is nothing new. Banks have been pushing online banking for years, but the pandemic has definitely accelerated the trend. Forcing them to create or upgrade their own smartphone apps, wallets and dynamic contactless payment solutions.

In April, British bank Lloyds saw a 50% increase in the number of people registering for online banking compared to last year. Another UK-based bank, TSB has seen a rise of 137% in online banking enrollments since the lockdown started.

Who does this impact the most? The new kids on the block, of course. The digital dynamos — challenger banks. Let’s see how they’re handling 2020 so far.

Note: In the following section, we use the metric of the combined App Store and Google Play review numbers (MoM) as a measure of each app’s user base. This, of course, doesn’t explain the full story, but it gives us an indication of sentiment.

1. Revolut

Current valuation: $5.5 billion (2020)
Users: 7 million+ (2020)

Revolut have never been ones to rest on their laurels. Last week, they extended their D series funding round by $80 million, taking the total round to $580 million. They recently launched a junior banking service and also added crypto trading for their US-based customers.

Yet, customer numbers have plateaued over the course of the crisis, as spending has dropped. Complaints about the quality of Revolut’s customer support have also dampened some of the hype. Could that valuation be teetering?

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Combined store review numbers

Source: Appfigures

2. N26

Current valuation: $3.5 billion (2019)
Users: 5 million (2020)

The German online bank backed by Peter Thiel (of PayPal fame) hit the headlines in February, announcing that it was pulling its service out of the UK following the Brexit result. All 200,000 of its UK users were told to hop off the platform by mid-April. Oops!

N26 has continued to boost its service offering for its remaining customers, however. Over the last few months, it’s partnered with several big names to bring them perks, the latest of which being Adidas, just last week. It’s also partnered with UK-based fintech, Transferwise to offer fast and cheap cross-border payments to Brazil, Mexico, Singapore, and the Philippines.

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Combined store review numbers

Source: Appfigures

3. Monzo

Current valuation: 1.24 billion (2020)

Users: 3.5 million+ (2020)

It’s been a tough period for Monzo. In what was possibly the worst kept secret in finance, the challenger managed to raise £60 million, but the down round saw the company’s valuation plummet by 40%. Still raising cash but at the expense of itself. Not great!

The UK-based alternative bank also angered a number of users (and the FCA) last month when they froze a fair few accounts without warning and without good reason. This left may a disgruntled customer without access to funds in the middle of the pandemic.

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Combined store review numbers

Source: Appfigures


It’s not been an easy period for challenger banks. The pandemic hit people’s wallets and there’s still a reluctance to spend, denting transaction fees. However, as a number of them operate a monthly-subscription model, money has continued to flow in and there’s clearly no shortage of private investor interest.

Challengers have the digital know-how, a cost-efficient mindset and the cool, cutting-edge vibe (which brings very lucrative marketing partnerships with globally-recognised brands) to continue to push boundaries and provide an alternative to mainstream banks. Yet, they need to up their game in terms of customer support and operational transparency.

On the other side of the coin, there’s still a lot of trust in traditional, bricks-and-mortar banks and that’s something that money just can’t buy. These guys have been around for a long time and have deep pockets. They now also have a more urgent reason to digitize sooner rather than later.

There’s plenty of room for everyone in this space, but the race to the top of personal finance is really starting to heat up!

What’s Going On In The Markets This Week?


No major events scheduled.


No major events scheduled.


● Australia is due to release its Inflation Rate figures (YoY) (AUD).

● A little later, the US FED will announce its Interest Rate decision (USD).


● We’ll hear the US’ GDP Growth Rate (QoQ) (USD).


● China will release its NBS Manufacturing PMI (CNY).

● The EU will announce its Core Inflation Rate and both QoQ and YoY GDP Growth Rates (EUR)

● Finally, the US is expected to reveal its YoY PCE Price Index (USD).

That’s all we have time for this week. If you liked what you read and think these articles would make your traders happy, then you should contact us We’ll be happy to discuss your specific content needs and provide you with a tailored solution.

Speak soon!

The Contentworks team

Contentworks is a content marketing agency that's all about telling your story and achieving your goals. Unless you want to climb Everest.

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