There are still many ways for banks to make money, and challenger banks are betting on the fact they can do it with less overhead.

Big European banks have started closing down branches and laying off staff, while they were pumping VC money to scale across several countries/continents and acquire a customer base among socio-demographics with high potential (mostly young, tech-savvy, traveling, reasonably good with money). These people eventually grow a bit older and need loans, mortgages, investments...