Tandem, which counts the founder of Ebay (>> eBay Inc) as an investor, is a digital-only lender focused on customers in their 20s and 30s and is one of several niche banks bidding to poach market share from the likes of Barclays (>> Barclays PLC), Lloyds (>> Lloyds Banking Group PLC), HSBC (>> HSBC Holdings plc) and Royal Bank of Scotland (>> Royal Bank of Scotland Group plc).

Besides winning new business, the strategy also helps the bank bypass strict rules barring interaction with clients while waiting for a banking licence, Knox said. "With banks you have a two-year process applying for an application, and if you even so much as tickle a customer in that time, they will slap you around the face and say you can't have your banking licence, Knox said. "So we decided, let's bring in customers a different way."

The big four lenders control more than three quarters of personal current accounts and provide nine out of every 10 business loans, a concentration the government says is unhealthy for the economy.Knox, who has a background in venture capital and previously set up money transfer service Azimo, is an atypical banker. He prefers open-necked pastel shirts rather than the suit and tie usually favoured in Britain's financial sector, and often swears for emphasis.

Two of Tandem's "challenger" bank peers Shawbrook (>> Shawbrook Group PLC) and Aldermore (>> Aldermore Group PLC) fetched impressive valuations in their 2015 flotations, meaning Tandem's share giveaway could spell a windfall for customers if it achieves similar success.When Tandem launches this summer it will aim to attract customers with a programme that goes through their statements finding ways they can save by switching products or changing their behaviour, he says.Advice could range from changing utility providers to paying off credit card debts with any savings. "The secret sauce is not just so much about switching. It is about how we make it interesting for you," Knox said.

(Editing by David Holmes)

By Andrew MacAskill