Why do banks create challenger bank brands?
There are many reasons to this. But one I want to mention in this post is preserving the option to shut down the offering if things don’t work out. We have seen this recently with JP Morgan closing down Finn – their digital only bank targeting millennials. They are now planning on opening a UK challenger bank.
Clearly from a marketing point of view, Finn was targeting younger customers and providing a different digital experience to their other brands.
However, having that digital only proposition under a different brand gave JP the option to experiment with and stop the offering without affecting its established Chase brand.
I also find it interesting the way RBS (or to go by their new brand, Natwest Group) has followed a strategy of creating two different challenger bank brands – Bo and Mettle. Sounds to me like an interesting and lower-risk way to test digital offerings to the consumer and small business customers without affecting their main brands.