This newest form of e-banking has its appeal, as it is convenient, fast, and transactions - such as remote check deposits and transfers - can be accomplished real-time. This has its appeal to many consumers but most notably Millennials who are often just starting out their career and may not have the need yet for more complicated financial products.
Just how popular are they? As mentioned before, Challenger Banks are currently more popular in the UK and Europe than in the U.S. N26, a German-based challenger bank, as of 2018 had 1 million clients across Europe, and is on pace to hit 5 million by 2020. Revolut and Monzo, two of the largest challenger banks in the UK, have millions of customers each and are still growing, with both looking to expand to the U.S. market; Resolut actually has a waitlist! Don't discount the US neobanks - US-based Chime has two million online checking accounts and is also growing, adding more customers each month than either Wells Fargo or Citibank.
But these Challenger Banks are not the right choice or fit for all consumers. Sure, they are attractive, trendy, and have their place with some demographics but don't forget that while they are shiny on the surface, your members are with a credit union for a reason. They chose your credit union because of the expectation of quality member service and a personalized experience. They want to know that if a problem should arise, a life event takes place, or a member has retirement or investment questions, they have someplace to go, someone to talk to. Rise up to the challenge the Challenger Banks pose by sticking to the core of your business.