They poach the wealthy clientele by offering attractive financial packages and new services. Technology is the driving force. Meanwhile, smarter database management and marketing techniques allow the newcomers to target the well-off customers. The assault is coming from several directions. They offer online and telephone banking and tend to specialise on just a few financial products, for example current and savings accounts, or cheap mortgages and insurance deals.
Some banking business is more profitable than other financial products.
Single product operators, offering credit cards for example, can be leaner and more competitive than traditional banks. Financial cross-over Insurance companies, with their wealth of experience in other financial sectors, invade the banking sector, making use of their vast customer data bases and new technology. Retailers turned bankers Even companies without any experience of the financial sector are now taking the plunge. Many supermarkets, car manufacturers and other retailers are now offering financial services which go beyond the traditional store credit cards or cheap loans for the deal on wheels. Some banks recognised the threat early on.