Neobanking is defined as novel banking technology which provides complete online banking solutions to its customers. Neobanking differs from traditional banks, as they have no physical offices & branches. These banks allow everything from opening an account to other services, without the need to go to a bank. These digital solutions range from banking services like accounts, loans, transfers, and cards to recommending financial services based on lifestyle choices such as spend analysis, and automated saving. Neobanks don’t rely on outdated, legacy technology, and hence tend to have stringent measures for the privacy, security, and safety of their platforms. The complete safety of customer data becomes a priority. Moreover, Neobanks function 24 hours. One can effortlessly carry out day-to-day tasks like making payments, anytime, anywhere. Their customer services are customized, and the use of AI helps to solve customer concerns in real-time. Furthermore, neo-banks don’t require any physical infrastructure to maintain physical branches, they save on overhead expenses. This is partly passed on to customers in the form of no or low charges for various transactions or services, and favorable interest rates. One of the primary attractions for neobank customers is lower fees and access to an account, even if they have a poor credit history. This can help individuals who struggle to open traditional banking accounts due to a lack of resources or a lower credit score. With neobanking, they can start fresh with an account tailored to fit their needs and help them reach their financial goals.
Increase in digitalization of banking activities and increase in demand for digital banking solutions is boosting the growth of the global neobanking market. In addition, increase in use of mobile banking is positively impacts the growth of the market. However, security issues and privacy concerns and high implementation cost is hampering the neobanking market growth. On the contrary, rising Investments in fintech industry is expected to offer remunerative opportunities for expansion of the market during the forecast period.
The neobanking market is segmented on the basis of account type, service type, application, and region. On the basis of account type, the market is categorized into business account, and saving account. On the basis of service type, the market is fragmented into mobile banking, payments & money transfer, checking/saving accounts, loans, and others. By application, it is classified into enterprise, personal, and other. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players that operate in the neobanking market are Monzo Bank Limited, Movencorp, Inc., WeBank, PRETA S.A.S., N26 AG, Revolut Ltd., Ubank, Pockit LTD, Starling Bank Limited, and Atom Bank PLC These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Increase in digitalization of banking activities and increase in demand for digital banking solutions is boosting the growth of the global neobanking market. In addition, increase in use of mobile banking is positively impacts the growth of the market. However, security issues and privacy concerns and high implementation cost is hampering the neobanking market growth. On the contrary, rising Investments in fintech industry is expected to offer remunerative opportunities for expansion of the market during the forecast period.
The neobanking market is segmented on the basis of account type, service type, application, and region. On the basis of account type, the market is categorized into business account, and saving account. On the basis of service type, the market is fragmented into mobile banking, payments & money transfer, checking/saving accounts, loans, and others. By application, it is classified into enterprise, personal, and other. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players that operate in the neobanking market are Monzo Bank Limited, Movencorp, Inc., WeBank, PRETA S.A.S., N26 AG, Revolut Ltd., Ubank, Pockit LTD, Starling Bank Limited, and Atom Bank PLC These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Key Benefits of Stakeholders
- The study provides an in-depth analysis of the global neobanking market forecast along with the current and future trends to explain the imminent investment pockets.
- Information about key drivers, restraints, and opportunities and their impact analysis on global neobanking market trend is provided in the report.
- The Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
- The quantitative analysis of the market from 2022 to 2032 is provided to determine the market potential.
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Key Market Segments
By Service Type
- Loans
- Others
- Mobile Banking
- Payments and Money Transfer
- Checking/Savings Account
By Application
- Enterprise
- Personal
By Account Type
- Business Account
- Saving Account
By Region
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- South Korea
- Australia
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
Key Market Players
- Atom Bank
- Monzo Bank Limited
- Movencorp Inc.
- N26
- Pockit Ltd
- PRETA S.A.S.
- Revolut Ltd
- Starling Bank
- UBank
- WeBank
Table of Contents
CHAPTER 1: INTRODUCTION
CHAPTER 2: EXECUTIVE SUMMARY
CHAPTER 3: MARKET OVERVIEW
CHAPTER 4: NEOBANKING MARKET, BY ACCOUNT TYPE
CHAPTER 5: NEOBANKING MARKET, BY SERVICE TYPE
CHAPTER 6: NEOBANKING MARKET, BY APPLICATION
CHAPTER 7: NEOBANKING MARKET, BY REGION
CHAPTER 8: COMPETITIVE LANDSCAPE
CHAPTER 9: COMPANY PROFILES
List of Tables
List of Figures
Executive Summary
According to this report, the neobanking market was valued at $68.95 billion in 2022, and is estimated to reach $3252 billion by 2032, growing at a CAGR of 47.3% from 2023 to 2032.Neobanks are online-just economic foundations that are like banks. A neo bank is a sort of digital bank with no branches. It is not genuinely present in a particular area; neobanking is overall on the web. Neobanks can be called fintech firms that give computerized and mobile-first financial arrangements installments and money transfers, money loaning, and so on. In contrast to a traditional banking system, neobanks have totally a unique business model in general.
Key factors driving the growth of the neobanking market increase in digitalization of banking activities, increase in demand for digital banking solutions, and increase in use of mobile banking. Mobile banking is gaining traction with the increase in use of smartphones and other mobile devices. In addition, neobanking service providers are expected to provide solutions that enable banks and financial institutions to provide seamless mobile banking experiences to their customers. For instance, in May 2021, Blue Ridge Bank partnered with Aeldra Financial, Inc to launch a mobile neobank called Aeldra and to provide unprecedented financial access to an underserved segment in the BRICS (Brazil, Russia, India, China, South Africa, and others) Plus countries. Moreover, the expansion of mobile banking is fueled by an increase in demand for self-service and personalization of products and services, which in turn drives market growth. Furthermore, technical improvements in mobile banking, such as the delivery of customized real-time customer support via smart bots, and an increase in the use of mobile devices that allow users to access instant customer help, propel market expansion.
The market also offers growth opportunities to the key players in the market. Fintech companies have increased investment in ML and AI solutions to transform management of financial institutes for providing enhanced services to the end users and to automate the necessary solutions. In addition, with rise in complexity and competition in the neobanking market, the demand for industry-specific solutions increased to meet the goals of the companies and AI-based financial solutions are helping Fintech and other industries to enhance their security and upsurge their revenue opportunity, which drive the growth of the market. Furthermore, AI and ML are expected to assist financial institutes at various stages of risk management processes ranging from identifying risk exposure, measuring, estimating, to assessing its effects. Moreover, increase in investments in AI and ML offers the potential to transform the area of automation for time-consuming, mundane processes, and offering a far more streamlined and personalized customer experience, which enhances the growth of the market. In addition, key financial institutes such as Bank of America, JPMorgan, and Morgan Stanley, have invested heavily in ML technologies to develop automated investment advisors and train systems to detect flags such as money laundering techniques and for other fraud cases, which in turn is expected to provide lucrative opportunity for the growth of the market.
The Neobanking market is segmented into account type, service type, application, and region. On the basis of account type, the market is bifurcated into business account and saving account. On the basis of service type, the market is fragmented into mobile banking, payments & money transfer, checking/saving accounts, loans, and others. On the basis of application, the market is classified into enterprise, personal, and other. Region wise, it is analyzed across North America (the U. S., Canada), Europe (the UK, Germany, France, Spain, Italy, and rest of Europe), Asia-Pacific (China, Japan, South Korea, India, Australia, and rest of Asia-Pacific), and LAMEA (Latin America, Middle East and Africa).
The key players profiled in the study Monzo Bank Limited, Movencorp Inc., WeBank, PRETA S. A.S., N26, Revolut Ltd., UBank, Pockit LTD, Starling Bank, and Atom Bank. The players in the market have been actively engaged in the adoption various strategies such as acquisition, and partnership to remain competitive and gain advantage over the competitors in the market. For instance, in January 2021, UBank acquired Australian neobank 86 400 to deliver UBank strategy to enhance 86 400 customer experience and meet their changing needs. This has created a stronger and more competitive banking alternative for Australian customers.
Key Market Insights
By account type, the business account segment was the highest revenue contributor to the market, and is estimated to reach $2.07 billion by 2032, with a CAGR of 46.2%. However, the savings account segment is estimated to be the fastest growing segment with the CAGR of 49.4% during the forecast period.By service type, the mobile banking segment dominated the global market, and is estimated to reach $1.16 billion by 2032, with a CAGR of 20.4%. However, the loans segment is expected to be the fastest growing segment with the CAGR 52.6% during the Neobanking Market Forecast.
Based on region, Europe was the highest revenue contributor, accounting for $25.67 million in 2022, and is estimated to reach $1.30 billion by 2032, with a CAGR of 48.4%.
Companies Mentioned
- Atom Bank
- Monzo Bank Limited
- Movencorp Inc.
- N26
- Pockit Ltd
- PRETA S.A.S.
- Revolut Ltd
- Starling Bank
- UBank
- WeBank
Methodology
The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.
They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.
They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:
- Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
- Scientific and technical writings for product information and related preemptions
- Regional government and statistical databases for macro analysis
- Authentic news articles and other related releases for market evaluation
- Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast
Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.
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