There’s recently been a media buzz surrounding Atom Bank, one of many new start up banks who are breaking into a sector that's been unchallenged for years. But how worried should the old school bank brands be about the shift in approach from these new challengers?

Atom’s approach is niche to say the least – it’s focus is solely on the millennial market (18-35 year olds who are tech and marketing savvy) and it’s brand is clearly set to disrupt and challenge the big players in the industry. But any industry who ignores this lucrative market do so at their peril.

Let’s not forget the track record of the founders involved either who include Athony Thompson (Metro Bank) and Mark Mullen (First Direct), both of whom have successfully challenged the traditional banking model. Atom are not alone in their challenger status. They are part of a new glut of banking start ups including Open Bank, Oaknorth, Shawbrook, One Savings - the list is ever growing.

How are they disrupting? Some initial thoughts:

1. They want to challenge the multi-channel model

There has been a recent focus within the industry on making banking & banking support accessible and available through multiple channels - Branches, Telephony, Web, Email, Twitter and social media. The big players have recognised the shift in consumer focus driven by the millennial’s demand for ‘here and now’ and have responded with banking apps and even collaborations with the likes of Top Shop. But these have just been ‘dabbles’. Atom’s approach and message is that it is the first mobile only bank.

2. They’re niche and focused on their target market

Simple, accessible, anti-corporate, driven by tech and putting the customer first – this is catnip to a millennial audience. Older people tend to not like change and are known to stay loyal to their bank, no matter what. Older people want to use expensive support services and rely on their local branch and face to face support. Currently, 1 in 4 adults are classed as ‘millennial’ and with an estimated 17 million in the UK alone by 2019, it suddenly doesn’t seem so ‘niche’. Focusing solely on this consumer group makes very sound commercial sense indeed.

3. They are lean and mean

No branches, no call centres, no direct human support, which means vastly lower costs compared to the big boys in the sector. Although Atom are making claims that their customers are at the very core of their business with their ‘Telepathic Banking’ brand message, it’s an extremely beneficial result of this that this is also extremely economical. Call me cynical but I think this might also be the very core of their business model but hidden behind their slick branding and polished rhetoric.

4. They believe that digital is the future of banking

They're right. The British Bankers’ Association estimates that by 2020 the number of people using mobile apps for banking will be twice as high as all other channels added together.

In short, the huge shift in consumer appetite and expectations, coupled with the advancing technology, means banks will have to change dramatically, and fast if they want to survive. I’ll be watching with great interest to see how the ‘traditional’ banks respond to these new kids on the block, and more importantly, how consumers do.