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London (AFP) – Fusion of the computer. Unexplained gaps in accounting. Staff management scandals.
For small banks that want to compete with world-famous historical giants, UK finance has turned out to be a minefield.
By visiting their local agency or online, the British had a hard time breaking their habit of relying on a large bank with a well-established name.
The British Big Five – Barclays, HSBC, Lloyds, Royal Bank of Scotland and Santander UK – hold a 63% market share in the retail banking market, according to the Center for Research on the Economy and Enterprises.
This dominant position remains despite the years of hardship that followed the 2008 financial crisis, in which interest rates fell to historically low levels and consumers are unlikely to keep their money on hold. their savings accounts.
"The last 20 years have been marked by a significant consolidation of the UK retail banking market," wrote Stephen Jones, managing director of the British Banking Banks Professional Association, in a report.
"The structure of the UK retail and commercial bank is relatively concentrated, with a notable lack of medium-sized scale competitors."
– Small but crowded ground –
Paradoxically, this market power was reinforced by the same crisis that tarnished the reputation of the big banks a decade ago.
The Big Five, as well as the Nationwide mortgage specialist, together own about 1 800 billion pounds of retail banking badets.
Their competitors have a combined total of 360 billion pounds sterling.
Although relatively small, the field of electronic mail is full of names such as Metro Bank, TSB (a subsidiary of the Spanish company Banco Sabadell) and CYBG, which has just merged with Virgin Money Richard Branson.
They each have millions of customers and are joined by "fintechs" such as Revolut and Monzo, two digital banks with ambitious ambitions who wish to develop beyond their clientele of young city-dwellers.
– Costly errors –
Newcomers have little in common except a common experience of pain scandals that are in the news.
The latest, the Metro Bank, has lost its luster after a brilliant launch in 2010 of American banker Vernon Hill, better known for having qualified his customers as "fans".
Hill strives to rebadure its 1.7 million fans that Metro Bank is still there, having raised funds, seen a drop in its profits and being under the control of the regulators for having described unsavory real estate loans as "low risk".
Metro Bank's problems occurred a few months after the TSB suffered a complete computer failure caused by a software update, which resulted in the loss of millions of customers' access to its site and application.
The break forced TSB to separate from its managing director and cost nearly $ 300 million – a considerable sum for a bank that broke with the Lloyds banking group to try its luck in 2013.
– Digital banking wave –
The UK digital banking sector has also not been spared, as it is undergoing the wave of changing consumer habits.
Perhaps no one had more damage than Revolut, who had to severely examine the management of her staff after a whistleblower accused her of forcing job seekers to work for free.
The boss and founder of Revolut, Nikolay Storonsky, born in Russia, now wants to move towards a more user-friendly business model.
Beyond these particular problems, which companies in other areas are familiar with, smaller banks have to overcome more regulatory barriers, which are particularly expensive.
And they must be financially strong enough to convince investors to follow them – a task complicated by the gloom of the seemingly endless Brexit crisis.
A decade of low interest rates has even forced giants such as Goldman Sachs to move away from their well-established niches and into the digital space.
Goldman's new Marcus online savings account offers higher interest rates than his usual competitors and works with Apple to launch a credit card.
Marcus has attracted more than $ 35 billion in online consumer deposits in recent years, a result that Goldman sees as a success.
Industry observers see the benefits of increased competition, which creates more options when physical branches disappear.
But a report from Parliament's Treasury Committee warns that branch closures mean seniors feel deprived of their money.
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