As challenger banks continue to evolve and gain market share within the SME community, the distinction between traditional banking institutions and these new players is fading. This topic was thoroughly explored by industry experts during the recent IFGS 2025 event.
In the panel session titled “What’s next for challenger banks?”, leading figures such as Emma Hagan (CEO of ClearBank UK), David Jarvis (CEO of Griffin), Alex Mollart (CEO of Tandem Bank), Mark Mullen (CEO of Atom Bank), and Eimear O’Brien (partner at Hogan Lovells) discussed the evolution and future of these banks.
Moderating the discussion, O’Brien inquired about what differentiates challenger banks from their traditional counterparts. Hagan noted that the rise of challenger banks followed the financial crisis, focusing on providing enhanced financial services that cater to consumers and SMEs, filling gaps left by established banks.
“Challenger banks emerged to deliver something distinct—a digital-first, tech-driven platform that prioritizes user experience and reinvigorates innovation in financial services,” said Hagan.
Mullen highlighted the contrasting trends in market share, indicating that while big banks see increases in valuations, they struggle to grow their customer base. “This gives me hope for the future. It demonstrates that change takes time, but commitment can drive success. Data shows that traditional banks are stuck in the past,” Mullen remarked.
O’Brien then shifted the focus to challenges within the challenger bank sector. Jarvis discussed how diverging regulatory frameworks can hinder growth, explaining, “Banks may find initial success but soon face challenges from regulations designed for larger institutions. While entering the market is straightforward, achieving sustained success can become burdensome due to regulatory constraints.”
Key sector trends were also examined, with Mollart emphasizing the need for challenger banks to scale up and diversify their products and services. “We are winning in our market and are now focused on developing offerings that foster stronger customer relationships,” he stated.
Regarding growth opportunities, Hagan suggested that collaboration with regulators and policymakers is essential to navigate regulatory complexities and effectively scale operations. She added that embracing innovations such as cloud technology, APIs, and AI is vital for maintaining relevance. Jarvis echoed this sentiment, emphasizing the necessity for global regulatory alignment for competitive growth.
Mollart pointed out that challenger banks could foster customer trust by providing modern and dependable services free from legacy system constraints. Mullen added that innovative strategies and a commitment to building a strong brand reputation can help distinguish challenger banks through better, quicker, and more cost-effective services. The goal should be to establish reliability and value over time.
In conclusion, Hagan stressed the importance of a relentless focus on scaling while prioritizing customer experience and innovation. Mollart and Jarvis concurred, emphasizing the need for a coherent vision and strategy.
Closing the panel, Mullen quoted Churchill: “Never, never, never give up,” encouraging perseverance in overcoming challenges.