Neo bank are digital-only banks without any physical branches and operates on a partnered bank license in the market. These banks provide digital and mobile-first financial payment solutions, remittances & money transfers services, lending, checking & saving account, insurance, and mortgages completely via mobile applications. In addition, neo banks also provide value-added services such as automated accounting, expenses management, and payroll, especially to growing small & medium enterprises.
Challenger banks are established firms and operate with a full banking license in the market. These banks provide services such as lending, investments & savings accounts, checking & merchant accounts, mobile banking, credit cards, mobile banking, and others (retirement savings, insurance products, and buying & selling of cryptocurrency). These banks are continuously challenging over existing traditional banks, by innovating & integrating several technologies in their product offerings. Together, neo and challenger banks have entered in the banking industry with advance features, real-time services and client-centric products & services posing challenges for the existing traditional banks in the market.
Higher interest rates offered to customers over traditional banks, government & regulatory supports toward banking operations, and better convenience provided via mobile applications are major driving factors of the market. However, acquiring customers online and profitability for these start-up banks limit market growth. Moreover, the neo and challenger bank market is expected to have lucrative opportunities such as to expand their business by strengthening online offerings to unbanked population in the emerging economies. In addition, business expansion, development of existing banking portfolio, bundling the product offerings and provide customized solutions are remaining some other focus areas for these Fintech banks in the upcoming years.
The neo and challenger bank market is segmented on the basis of service type, end user, and region. In terms of service type, it is classified into loans, mobile banking, checking & savings account, payment & money transfer, and others. By end user, it is bifurcated into business and personal. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players profiled in the global neo and challenger bank market analysis are Atom Bank plc, Fidor Solutions AG, Monzo Bank Limited, Movencorp, Inc., MYbank, Number26 GmbH, Simple Finance Technology Corporation, Tandem Bank, UBank limited, and WeBank. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Key benefits for stakeholders
Key market segments
By Service Type
By End User
By Region
KEY MARKET PLAYERS
Challenger banks are established firms and operate with a full banking license in the market. These banks provide services such as lending, investments & savings accounts, checking & merchant accounts, mobile banking, credit cards, mobile banking, and others (retirement savings, insurance products, and buying & selling of cryptocurrency). These banks are continuously challenging over existing traditional banks, by innovating & integrating several technologies in their product offerings. Together, neo and challenger banks have entered in the banking industry with advance features, real-time services and client-centric products & services posing challenges for the existing traditional banks in the market.
Higher interest rates offered to customers over traditional banks, government & regulatory supports toward banking operations, and better convenience provided via mobile applications are major driving factors of the market. However, acquiring customers online and profitability for these start-up banks limit market growth. Moreover, the neo and challenger bank market is expected to have lucrative opportunities such as to expand their business by strengthening online offerings to unbanked population in the emerging economies. In addition, business expansion, development of existing banking portfolio, bundling the product offerings and provide customized solutions are remaining some other focus areas for these Fintech banks in the upcoming years.
The neo and challenger bank market is segmented on the basis of service type, end user, and region. In terms of service type, it is classified into loans, mobile banking, checking & savings account, payment & money transfer, and others. By end user, it is bifurcated into business and personal. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players profiled in the global neo and challenger bank market analysis are Atom Bank plc, Fidor Solutions AG, Monzo Bank Limited, Movencorp, Inc., MYbank, Number26 GmbH, Simple Finance Technology Corporation, Tandem Bank, UBank limited, and WeBank. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Key benefits for stakeholders
- The study provides an in-depth analysis of the global neo and challenger bank market along with the current & future trends to elucidate the imminent investment pockets.
- Information about key drivers, restraints, and opportunities and their impact analysis on the market size is provided in the report.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the industry.
- The quantitative analysis of the global neo and challenger bank market from 2020 to 2027 is provided to determine the market potential.
Key market segments
By Service Type
- Loans
- Mobile Banking
- Checking & Savings Account
- Payment & Money Transfer
- Others
By End User
- Business
- Personal
By Region
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Netherlands
- Nordic Countries
- Rest of Europe
- Asia-Pacific
- China
- Japan
- South Korea
- India
- Australia
- Singapore
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
KEY MARKET PLAYERS
- Atom Bank plc
- Fidor Solutions AG
- Monzo Bank Limited
- Movencorp, Inc.
- MYbank
- Number26 GmbH
- Simple Finance Technology Corporation
- Tandem Bank
- UBank limited
- WeBank
Table of Contents
Chapter 1: Introduction
Chapter 2: Executive Summary
Chapter 3: Market Overview
Chapter 4: Neo and Challenger Bank Market, by Service Type
Chapter 5: Neo and Challenger Bank Market, by End-user
Chapter 6: Neo and Challenger Bank Market, by Region
Chapter 7: Competitive Landscape
Chapter 8: Company Profiles
Executive Summary
According to the report titled, 'Neo and Challenger Bank Market by Service Type, and End User: Opportunity Analysis and Industry Forecast, 2020-2027', the global Neo and challenger bank industry was valued at $20.4 billion in 2019, and the market size is projected to reach $471.0 billion by 2027, growing at a CAGR of 48.1% from 2020 to 2027.Neo and challenger bank provide banking services to individuals and businesses. The products and services include opening & operating accounts, payments & transfers, remittance solutions, lending, mobile banking, and alternative methods for assessing credit worthiness. These services are largely provided to micro & small companies and underbanked or unbanked customers in the market.
Government & regulatory support toward license approvals and higher interest rates offered to customers over traditional banks are the major factors that boost the neo and challenger bank market growth. Furthermore, immediate & personalized services provided via mobile applications and higher interest rates offered over traditional banks are some of the lucrative factors that boost the Neo and challenger bank market growth.
On the basis of service type, the loan segment dominated the neo and challenger bank industry in 2019, and is projected to maintain its dominance during the forecast period. Faster loan approval and funding compared to regular banks, with low or no banking fees via banking applications are driving the growth of loan segment in the market. Furthermore, the payment & money transfer segment is expected to grow at a significant CAGR during the forecast period.
On the basis offend user, the business segment dominated the neo and challenger bank industry in 2019 and is projected to maintain its dominance during the forecast period. Rise in adoption of mobile & digital banking by large firms and small & medium-sized enterprises (SMEs) for executing payment methods is anticipated to boost the growth of the business segment during the forecast period. Furthermore, the personal segment is expected to grow at a significant CAGR during the forecast period. Convenience toward easy transfers, lower fees for banking, and personalized services major factor that lead to the growth of the neo and challenger banking market.
By region, the global neo and challenger bank market was dominated by Europe in 2019 and is expected to maintain this trend during the forecast period. Neo and challenger banks in the region offer services that are four times cheaper than traditional banks on average, targeting professionals, and minors looking for digitalized banking in the market. For instance, Revolut Ltd., a British financial technology company targets millennials or frequent travelers by offering a multicurrency payment card with low currency conversion fees. However, Asia-Pacific is expected to exhibit fastest growth rate in the future due to emerging economies in the region. Factors driving the growth of the market in this region include easy & convenient banking services andrise in digital-only banks across countries such as Australia, Japan, China, and India. Thus, becoming some of the major neo and challenger bank market trends in the region.
Key Findings Of The Study
By service type, the loan segment led the neo and challenger bank market size, in terms of revenue in 2019.
By end user, the business segment accounted for the highest neo and challenger bank market share in 2019.
By region, Europe generated the highest revenue in 2019.
The key players profiled in the global neo and challenger bank market analysis are Atom Bank plc, Fidor Solutions AG, Monzo Bank Limited, Movencorp, Inc., MYbank, Number26 GmbH, Simple Finance Technology Corporation, Tandem Bank, UBank limited, and WeBank. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Companies Mentioned
- Atom Bank plc
- Fidor Solutions AG
- Monzo Bank Limited
- Movencorp Inc.
- MYbank
- Number26 GmbH
- Simple Finance Technology Corporation
- Tandem Bank
- UBank limited
- WeBan
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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