The New Bank USPs
As of October 2019, there are over 40 different digital banks or challenger banking alternatives available for consumers to choose from.
Starting a Digital Bank is becoming less of a technological problem and more of a business plan and a well defined unique selling proposition.

With the USPs becoming part of the differentiation and innovation layer, the banks are offering many different and new products for their customers.
Let's delve into the new world of Digital Banks USPs.
Please leave a comment if you want me to focus on a specific banking product or if you come across a feature or functionality that I missed — I am sure there are many of those.
Customer Facing USPs
These are the USPs that are designed with the customer experience in the centre. They are focused on goals and data and offer a level of transparency that users are not used to from the high street banks.
Let us review these USPs.

Spending Reports
A full detailed report of all spending including available metadata such as:
- spending location (geo-tagging, card location)
- business name
- business details
- business address
- business categorisation
Spending Categorisation
Logging all spending categories based on the type of business.
Sample categories include:
- Bills
- Eating Out
- Entertainment
- Expenses
- Finances
- Family
- Friends
- General
- Groceries
- Personal Care / Fitness
- Shopping
- Transport
Spending Location
Log location of spending and report based on the information available for example:
- Country
- Currency
- City
- Business
- Categorisation
- Budget per location / country
Budget Planning
- Create customised budget planning based on the spending metadata.
- Limit and alert based on spending limits of a specific category.
- Track past and future payments.
- Account for subscriptions and direct debits.
Budget planning can be shared in a joint account
Goal Saving & Pots
Create pots and custom savings goals.
Move money into these pots based on goals using different mechanisms such as:
- Regular payments
- Round-up expenses into savings pots
- Salary Percent
- Long terms savings
High-Interest Current Account
High-Interest rate on current accounts. Some digital banks provide 2–5% APR paid out daily or monthly. This is a major USP for new customers.
High-Interest Savings Account
This is designed to be long term savings account with APR of 3–6%. In some developing countries, you can even see 7–10% ramping APR with a limit on the savings and a ramping increase of interest rate.
Joint Bank Account
A quick way to create a joint household bank account. Quick way to close the account as well. The major USP here is time and hassle savings using a straight forward mutual confirmation of the KYC.

Foreign Exchange
Unique proposition around foreign currencies, foreign exchange, receiving and sending foreign currencies.
Offering good rates, reduced fees, dedicated IBAN, Swift, SEPA for every currency.
On the fly rates negotiation.
Foreign currency budgets.
Analytics, Spending Timeline & Recommendations
Analyse spending over time.
Review budgets and savings and provide actionable recommendations based on the information collected.
Recommend alternative deals for:
- Mobile
- Insurance
- Airlines
- Hotels
Blocked Categories
Provide the ability to block spending categories such as:
- Gambling
- Pornography
- Online shopping
Limits & Allowance
Set a limit per card, person, category.
Create allowance based on a given bank card, individual or category.
Limit maximum transaction.
Limit daily spend.
Limit online spend
Limit cash withdrawals

Notes & Tags
Add information on every transaction. Useful for sharing the details with partners, parents, accountants.
Create custom tags based on spending habits
Receipts
Attach receipts to a transaction. Take pictures of receipts with the phone camera. Very useful in places where tax is digital and invoices must be kept by law.
Security
Enable advanced security mechanisms such as:
- Location-based security — allow transactions in the vicinity of the mobile phone
- Block online transactions
- Force 2FA for payments
- Show pin and card numbers
- Freeze / UnFreeze card
- Report Stolen / Lost / Damaged / Broken
- Enable / Disable mag stripe payments
- Enable / Disable ATM withdrawals
- Enable / Disable chip and pin payments
- Enable / Disable contactless payments
Rebates & Rewards
Offer rebates based on spending. Rebates are translated to perks such as:
- Cinema tickets
- Cash or Credit
- Event tickets
Partner with vendors to provide an instant rebate for purchases over a certain amount. Some banks offer rebates for bicycle shopping, home improvement, department stores and suit making.
Transfers
Transfer money between accounts quickly and with none or little fees. Bill payments to specific organisations, utilities, etc. Bill payments feed into the recommendation engine.
Define scheduled payments.
Allow international payments
Block payments based on categories i.e. cryptocurrency, international, foreign currency.
Support IBAN for unique identification of payments. Enable Swift and SEPA payments and money transfers.
Request Money
Request money using a shared link, app notification or an SMS message.
Allow card transfers.
Generate payment confirmation.
Trace payments / unique end-to-end reference number
Split Bills
Enable the ability to split bills between multiple individuals.
Produce copies of the receipts and transaction to all individuals.
Per cent based bill splitting.
Low or No commission
One of the biggest issues with high street banks is their fees and commission. The challenger banks have reduced costs associated with their structure and therefore should offer very low or no commission at all for most type of transactions.
Overdraft
Do not allow overdraft or, if one accidentally happen, offer reasonable payment option with no fine for a certain grace period.
Again, this is one of the major pain points with high street banks

Crypto
Have the ability to invest in Crypto-Currency through pots and savings accounts.
Pay with Crypto Currencies
Mortgages
The mortgage market is on the verge of disruption. In the UK, a few startups are now focused on offering a new mortgage experience to consumers.
Some digital banks offer mortgages or partners with other mortgage lenders. I think this space will be changing significantly over the next 12–36 months.
Insurances
Offer insurances as part of the card or for a small premium.
Type of insurance offered by digital banks are:
- Travel Insurance
- House and household insurance
- Mobile insurance
- Car insurance
Airport Lounges
Provide access to airport lounges as part of the basic offer (with payment) or part of a premium account (with no payment).
Gamification of Banking
Through a set of Open APIs, some banks offer games that focus on driving responsible banking.
Example include:
- Share goals and reach a saving target sooner.
- Save 1p on day one, increasing up to 365p on day 365. nice little pot at the end.
- Roundup into stocks & shares ISA / Investments.
- Budget awards
Strategic USPs
Social Responsibility

Younger generation opinion of High street banks is not positive. They are considered a necessary evil. Banks are rarely considered as working for the people. Different scandals around money laundering, tax evasion, high bonus payments and bailouts, have all left a sour taste in the consumer’s mouth.
Socially Responsible Digital banks can and should offer a clear and transparent Corporate Social Responsibility policy, invest part of the earnings back in the community and work to promote a social agenda
Social Enterprise
All earnings after operational costs are invested in a social cause such as environment, sustainability, charitable causes, etc.
Round-up Charity Donation
Offer the ability to send to charity the round-up of every payment made. A unique proposition is to be able to select the charity from a list of charities.
Carbon Neutral

Bank will invest in offsetting and being Net Zero in terms of the effect on climate change. These investments will be spent as part of standard operational costs and will be calculated regularly across the bank infrastructure and its partners.
True carbon-neutral banks enforce this on their supply chain as well and choose their technology and business partners accordingly.
Business Accounts

Opening a business account, with all its implications, as a Strategic USP for some digital banks.
As part of the business account offering, digital banks tend to offer additional services such as:
Accountancy Tools
Some digital banks offer the ability to log, report and manage all transactions in an accountancy software that they developed.
Create Invoices
The ability to generate and send invoices to customers.
Receipts Logging
Manage all receipts. Keep digital copies for tax auditing purposes and to share with an accountant.
Expenses Tracking
Track, approve, budget and report on expenses.
Keep all expenses receipts in digital format
Industry Rebates
Rebates apply across all business cards of an organisation. These rebates are industry-specific and the business owner can decide which rebates to sign up for example:
- Builders rebates.
- Home improvements rebates
- Petrol rebates, etc.
Business Perks

There is a fierce competition on getting businesses into a bank. Perks can tilt the decision one way or the other. Below are some of the perks that some digital banks offer to their business account holders.
- Discount at Apple
- Zipcar voucher
- Google ad-words voucher
- Expensify Voucher
- Coffee discount
- CRM access
- Slack discount
- Amazon business
- WeWork trial period
- Accounting Software
Transaction Fees
Most high street banks, after the introduction period, charge fees for incoming and / or outgoing payments.
There are charges for international transfers and usually, there is a high commission with foreign currency exchanges.
Challenger and Digital Banks that offer business accounts tend to reduce or even eliminate these costs. Often, limit the number of free transactions based on the plan that the business had signed for.
Integrations
Integrations are very common with all business accounts and include tight partnerships with organisations that offer support services to the business such as:
- Accountancy firms — XERO, Sage
- Collaboration — Slack, Confluence
- Expense — Expensify, Concur
- Open APIs for any additional, custom integrations.
Demography
Focus on unique demography is very popular. At first it may seem as if it will limit your target audience but in fact, it will make your business more focused, allow you to develop features that will feel almost personalised to your consumers, increasing your uniqueness and emphasise the value you bring.
Focus on a cultural group
Based on support for religious causes, communities such as LGBTQ, minorities etc. Providing an experience that is dedicated and unique to these communities can increase the value of the bank brand within the community and establish the bank as a bank that cares.

Youth and Kids
Parents invest in their kids a lot. From education to wellbeing. Today’s world is very different than the one we grew up in and the right bank can help parents monitor and manage their kids’ allowance as well as teach the kids the value of money and financial management. These services offer the ability for allowance, block purchases with specific categories, location-based payments, limit settings, support for subscriptions (Apple Music, Spotify), parents payment approvals.
Students
Banks that focus on students will take into consideration the student lifestyle, normal expenses, ability to offer some management to parents, accept student loans and buy educational related products and services. It will tailor its offering, rebates and plans accordingly.
Additional Features
These are considered as basic features that every bank should have
Scheduled Payments
The ability to schedule a payment for a specific date and time in the future.
Recurring Payments
The ability to schedule a recurring payment to an individual or an entity. Support subscription payments.
Direct Debits
Have the ability to register, approve and manage direct debits.
Mobile payments
Support mobile payments such as Apple Pay and Android Pay
Banking Statements
Statements are still required by different institutions for account verification, mortgages and loans etc. This is part of the old banking world but digital banks must support it in an electronic form like a digitally signed PDF.
Customer Support
Most digital banks offer chat support only. It seems like this is enough for most of its customers but in order to attract the older generation, some level of live agent support is recommended.
