Counting Up and Chip launch into an already crowded market

It’s a rare day in the financial sector when someone doesn’t announce the launch of a new bank or payments app. So how can any new entrant stick out from all of the other options? Two newbies, Chip and CountingUp, think they might have found out the answer.

Chip was launched in October 2016 and utilises artificial intelligence (AI) to monitor spending and help consumers save. However, its ambitions are greater and it plans to tackle the overdraft.

Speaking to RBI, Chip CEO Simon Rabin says: “Our first revenue feature we’re launching next year is our overdraft product. It adds onto a current account, analyses when they get overdrawn and instantly loads money into their current account. This prevents them from becoming overdrawn at a lower rate than their bank is charging.

“In order to do that, we need a deposit licence. We basically take over the function of the overdraft.”

In 2016, 2.1 million people used their overdraft every month of the year, according to industry figures. Half of financial charity StepChange’s clients have overdrafts and own an average of £1,722 ($2,297) each.

Chip follows other new entrants attempting to gain a banking licence despite having relative success without. Cashplus, a “challenger bank”, has recently touted the idea of receiving a banking licence.

Countingup aims to launch January 2018 as a combined banking and accounting proposition targeting the UK’s 4.2 million entrepreneurs.

The Countingup app will help owners with accounting, VAT returns, profit and loss reports, invoicing and machine learning book-keeping technology.

Customers will be able to open a current account on their smartphone in just five minutes. The account comes with a UK sort code & account number and a contactless MasterCard.

Tim Fouracre, the founder and CEO of Countingup said: “Countingup is the fastest challenger bank to launch in the UK. Inception to launch of our business current account has taken just over four months and that’s down to a fantastic team who are determined to make running your business as simple and as automated as possible.”

While there is space for a new exciting offering, the space is getting more and more congested. New banks such as Monzo, Starling, Tandem and many more are exciting customers.

In addition, firms without a banking licence such as Monese and U are hoping to be inclusive and transparent. They also already have customers.

These two new entrants need to offer something incredibly special or risk fading into nothing.

Patrick Brusnahan writes

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