What's going on?

British �challenger bank� Tandem announced on Tuesday that it�s buying Pariti, a money management startup that will help the bank better tailor its services to individual customers� needs.

What does this mean?

Having got hold of a UK banking license through its purchase of iconic department store Harrods� banking business last year, Tandem (which currently has about 21,000 customers) set about looking to grow further. It�s now landed on Pariti: an app that helps its 95,000-odd users manage their finances and even work down existing debts by moving loans to recommended third-party providers.

By buying Pariti, Tandem likely hopes to roll together Pariti�s customer-oriented offering with its broader banking business: which could mean offering existing customers an improved in-house lending service.

Why should I care?

The bigger picture: There are advantages to directly marketing services over hosting a marketplace.

Tandem�s CEO has emphasized that the company is keen on helping Pariti develop its own bespoke financial products, rather than merely continuing to partner with third-party lenders. In general, fintech firms like to analyze customer data and use it to design financial services that meet their customers� specific needs (like offering them savings advice based on their spending habits). Controlling the delivery of those services from start to finish may therefore be a more desirable ��and more profitable � course of action.

For you personally: 2018 marked the official beginning of �open banking� in Europe.

Until recently, banks didn�t have to work all that hard to keep customers happy. But now new European legislation has made it much easier for consumers to connect their clunky old bank accounts with apps that want to help you manage your finances more efficiently. Now, as big banks scramble to launch their own tech-savvy platforms � and even Amazon looks to get some skin in the game � smaller fintech firms may be looking to join forces. The good news is that all this competition likely means access to better services at a low cost!