Growing pains for digital banks

It's not all been plain sailing for digital banks since they launched a few years ago. Ben Judge looks at how they have fared.

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A promising new player, but have a back-up plan

Mobile-only "challenger" bank Tandem launched in 2016, raising more than £2.3m in an hour on crowdfunding platform Seedrs. Since then, it's not all been plain sailing it lost its banking licence earlier this year after a £29m planned investment from Fraser Financial Services (owned by China's Sanpower Group) fell through. But last week, Tandem announced plans to buy Harrods Bank, which has been in business since 1893 but has been loss-making for many years. If the deal is approved by the financial regulator, Tandem will get Harrods' banking licence, along with £200m of loans, and £300m in deposits, reports Lynsey Barber in City AM. That would propel it from also-ran to one of the bigger digital banks. So how are the other challengers Atom, Monzo and Starling getting on?

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Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. 

As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.