A new name has launched in the British banking market in the form of German bank Fidor. In its home country, Fidor currently has roughly 100,000 customers and it has now launched new current and savings accounts with the intention of capturing a share of the UK market.
Fidor operates exclusively online, and distinguishes itself from its competition partly through the interesting way it uses social media. Its current account, in particular, offers an interest rate that increases according to the number of likes the bank gets on Facebook. At present, the rate offered on in-credit balances is 0.25%, but when Fidor’s Facebook page exceeds 10,000 likes they will double this to 0.5%.
Fidor originally intended to launch in the UK sooner, but faced some difficulties which delayed its plans. Now, however, it has overcome these and been able to start offering products to UK customers.
Back in Germany, Fidor has two offices in the cities of Munich and Berlin. Now, it is launching UK interests, the bank currently has an initial group of five staff based in London, though if the bank finds the success it hopes for in the UK this will most likely increase. The firm does not currently hold a UK banking license, though it has lodged an application in the hope of obtaining one. In the meantime, the German banking license that the firm currently holds allows it to offer the same services across the EU, meaning it has still been able to begin its efforts to attract UK custom.
The bank expects to initially attract a base of more financially knowledgeable customers, according to chief executive Matthias Kroner. However, it hopes that over time it will be able to attract a more varied and mainstream selection of customers, as people who are disillusioned with the major high street banks start looking into alternative options.
The bank also hopes over time to expand its range of products and services available in the UK. In Germany, Fidor already offers 25 different products and services including trading in precious metals and peer-to-peer lending. It already has plans to launch personal loans for UK customers, but does not want to do so until it has properly assessed the market. At this early stage, however, the bank does not even provide a debit card with its current account – though on its website it assures potential customers that this is “coming soon.”
Those who would save with the bank should be aware that, as it is trading under its German banking license, their savings would not be protected under the UK’s Financial Services Compensation Scheme (FCFS) but rather the equivalent scheme in Germany. This would mean that their savings are protected up to the equivalent of €100,000, currently around £72,000, instead of the newly-revised £75,000 limit of the FCFS (which is set to be approximately equivalent to this European scheme).