The start-up bank that uses data to get close to its customers (but not too close)

There is no shortage of challenger banks and neo-banks but it is often hard to discern what is being challenged or what is genuinely new. Most are doing nothing more disruptive than creaming off revenues established banks are too lazy or dysfunctional to retain. The character of five-year-old Chetwood Financial is harder to categorise. Its leadership emphasises the personalisation of its products rather than the quality of its customer relationships. By refusing to take ownership of its customers, Chetwood inverts the logic of the traditional bank. It sees customers not as cross-selling opportunities but as individual borrowers or lenders. It sees products not as either profit generators or cross-subsidies but as customised answers to particular problems. Chetwood knows what its customers’ problems are because it has used data to find and understand them in the first place. It is a perspective that not only makes it easier to manage credit risk – indeed, it enables the bank to reward improved risks with cheaper money – but subtly shifts the purpose of the enterprise way from making money for shareholders towards manufacturing the best retail borrowing and savings products it can, at least for its chosen clientele. Dominic Hobson, co-founder of Future of Finance, spoke to Mark Jenkinson, founder and director of strategy at Chetwood Financial.

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