I often discuss with clients the differing scales of financial services adoption across the globe and how scale can be leveraged by organisations to drive competitive advantage. Take, for example, the four biggest banks in the US compared to the four biggest banks in the UK and their respective customer numbers, and we observe that the US has almost three times more customers than the UK. Furthermore when we look at digital challenger banks worldwide, China’s biggest challenger bank, WeBank is ten times bigger than the UK’s biggest Revolut challenger bank with 365 and 35 million respectively. This scale, whilst not directly correlating to underlying profits, signifies much deeper pockets from which US companies can dip into to invest in their growth.
This disparity of scale plays an important role in several areas of competitor research, we have highlighted three key areas as follows:
Design Inspiration:
When looking for design inspiration, looking overseas and outside of your direct competitor set can yield powerful results. Larger organisations are likely to have more product and design teams who can laser focus on specific user needs, investing time and effort testing and iterating through multiple solutions to make sure they have the best possible solution. Additionally, with larger customer numbers comes larger data sets and samples which teams can interrogate and learn from to maximise the value of a particular feature or product area.
Technology Adoption and Trends:
Overseas competitors may be early adopters of emerging trends or technologies that have yet to gain traction locally. Monitoring their activities can provide insights into future industry trends and potential disruptions. For example, automated/robo investment platforms merged in the US with companies like Betterment (launching in 2010) and Wealthfront (launching in 2008) offering algorithm-based investment management services. The concept took off in the US before gaining traction in the UK with platforms like Nutmeg (launching in 2012) and Moneyfarm (launching in 2012).
Expansion Opportunities and Threats:
As barriers to international trade are reduced, the ability for organisations to enter new markets is increased. Organisations that are well established in home markets, with larger budgets for product development, operations and marketing, pose a significant threat to local players. For example, Chase’s digital banking proposition entered the UK in 2021 with plans to invest $1B over five years, and has hired more than 1,000 people to drive its growth. Robinhood has also recently entered the investing app market, and with 23.4 million funded accounts in the US, this poses a significant threat to current UK investing providers.
Keen to explore how industry leaders leverage scale for innovation and user experience excellence? Get in touch with BehindLogin for insights and updates on the evolving world of finance.
