Strategy, Growth, and Future of Tandem Bank: Can the Challenger Bank make the Most of the Open Banking System?

Strategy, Growth, and Future of Tandem Bank: Can the Challenger Bank make the Most of the Open Banking System?
Case Code: FINC182
Case Length: 9 Pages
Period: 2015-2019
Pub Date: 2021
Teaching Note: Available
Price: Rs.400
Organization: Tandem Bank
Industry: -
Countries: United Kingdom
Themes: Banks and Banking, Financial Institutions
Strategy, Growth, and Future of Tandem Bank: Can the Challenger Bank make the Most of the Open Banking System?
Abstract Case Intro 1 Case Intro 2 Excerpts


Conventional banking in the UK was inaccessible to one-eighth of the population. It was reported that six million people did not come under the purview of banking. This was an issue that concerned Ricky Knox, MBA from INSEAD and an entrepreneur. In 2015, he along with two of his friends started a challenger bank, Tandem Bank. Tandem challenged the business model of conventional banking in the UK by introducing transparent practices, lower fees, faster services, and a better user experience through reliable and ever-accessible digital interfaces. It was based on the model of a digital-exclusive banking service that leveraged technology and software to streamline retail banking. Tandem’s operational model was based on exclusive digital distribution channels, predominantly mobile. Its primary target segment comprised those applicants who were generally rejected by a conventional bank.

Tandem’s app offered the usual banking services like savings, investments, etc., and some unique products like a cash-back credit card with features like real-time spending updates; cards, that were targeted at people with a damaged credit history; a fixed savings account; an auto savings account that helped customers save money automatically; and RoundUp where small purchases were adjusted to the next pound, and the change got added to the balance. By April 2019, Tandem had acquired a customer base of 500,000 users across its offerings. With several unique products and services, it was all set to change the landscape of the banking industry in the UK.

As Knox moved with his next strategies, he found several opportunities in the form of the open banking legislation in 2018, which compelled traditional banks to share customer details with the rival banks. That was the move which opened the floodgates for challenger banks like Tandem. The challenges were also the growing competition from other challenger banks – the three primary players being Atom, Monzo, and Revolut. These competitors had more customers and were growing at a faster pace. Knox also needed to look at improving the valuation of Tandem, as the competitors were achieving unicorn status. The other challenges were the sluggish UK economy, Brexit woes, and a slowdown of the Chinese economy. Knox needed strategies to steer Tandem ahead; he needed to draw up a plan to increase both revenues and number of customers.


The case is structured to achieve the following teaching objectives:

  • Key factors that led to the rise of the challenger banks
  • Differences between the commercial banks and challenger banks
  • Competitive environment of the UK banking industry



Tandem Bank, Ricky Knox, Challenger Bank, Banking and Finance, Competition, Brexit, Innovations in Banking, New Trends in Financial Services, Technology in Banking, Bank Management, Entrepreneurship

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