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Challenger Banks in Europe - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

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  • 150 Pages
  • March 2023
  • Region: Europe
  • Mordor Intelligence
  • ID: 5529748
The Challenger Banks Market is poised to grow at a CAGR of 10% during the forecast period. The Europe Banking Industry is similar to the US banking landscape. The Europe banking sector is dominated by large players. However, it also showcases characteristics of a market ripe for disruption through a combination of economic, regulatory & secular trends. Following the crisis, large institutions damaged their reputations and created an environment for disruptors that are supported by innovative technology and can offer competitive banking and lending services. Covid-19 had a negative impact on challenger banks. The use of challenger banks fell by around 90%. However, the pandemic has forced more people than ever to start using digital banking applications. This strengthens the future of tech-oriented challenger banks.

The origins of Challenger Banks in the UK date back to the most recent crisis, during which large institutions engaged in questionable practices and undertook risks through complex business activities, difficult to comprehend for both regulators and consumers. UK has also led the charge across EU FinTech, as it is home to the most extensive network of established Challenger Banks in Europe. The UK has one of the most established and concentrated banking industries in Europe, with large financial institutions controlling significant market share and the market is supported by traditionally high regulatory barriers to entry.

Challenger Banks in Europe Market Trends

Challenger Banks are Gaining Traction in Europe

Challenger banks are innovating their ways to reach customers. For instance, in 2018, an overhaul of the Payments Services Directive (PSD2) required banks to open their payments infrastructure and customer data assets allowing third parties to use them to develop payments and information services for consumers essentially PSD2 dissolved banks’ monopoly on consumers financial data. This helped many players like N24, and Revolut to provide expanded service offerings and gain a customer base. Also, large banks entered partnerships with fintech players. These types of factors give challenger banks an advantage over other traditional banks to increase it's customer base.

Challenger Banks Offer Attractive Returns for Savers in Europe

Challenger Banks in Europe have this major proposition of better products at cheaper costs. Using the rapid technological adoption of customers and legacy systems of large players being insufficient to cater to their growing needs as an opportunity, new banks have come up with attractive products offered through online platforms at cheaper costs. The average interest rates offered for savings account holders of leading large banks in Europe are less as compared with challenger banks. The challenger Banks have done this by raising funds in recent year.

Challenger Banks in Europe Market Competitor Analysis

The report includes an overview of challenger banks operating across the region. We wish to present detailed profiling of a few major companies which cover product offerings, regulations governing them, their headquarters, and financial performance. Currently, some of the major players including OakNorth Bank, Revolut, Number26 GmBH, Monzo, and Tandem Bank, among others are dominating the market.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Porters 5 Force Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
4.5 Impact of COVID-19 on the Market
5.1 By Service Type
5.1.1 Payments
5.1.2 Savings Products
5.1.3 Current Account
5.1.4 Consumer Credit
5.1.5 Loans
5.1.6 Others
5.2 By End-User Type
5.2.1 Business Segment
5.2.2 Personal Segment
5.3 By Country
5.3.1 UK
5.3.2 Germany
5.3.3 France
5.3.4 Italy
5.3.5 Spain
5.3.6 Netherlands
5.3.7 Rest Of Europe
6.1 Market Concentration Overview
6.2 Company Profiles
6.2.1 OakNorth Bank
6.2.2 Revolut
6.2.3 Number26 GmBH
6.2.4 Monzo Bank Limited
6.2.5 Monese
6.2.6 Tandem Bank
6.2.7 Pockit
6.2.8 One Savings Bank
6.2.9 Shawbrook Bank
6.2.10 Aldermore
6.2.11 Atom Bank PLc
6.2.12 TSB
6.2.13 Clydesdale
6.2.14 Virgin Bank
6.2.15 Metro Bank
6.2.16 Starling Bank
6.2.17 Fidor Solutions AG*

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • OakNorth Bank
  • Revolut
  • Number26 GmBH
  • Monzo Bank Limited
  • Monese
  • Tandem Bank
  • Pockit
  • One Savings Bank
  • Shawbrook Bank
  • Aldermore
  • Atom Bank PLc
  • TSB
  • Clydesdale
  • Virgin Bank
  • Metro Bank
  • Starling Bank
  • Fidor Solutions AG