The global neobanking market size is estimated to register a substantial CAGR during the forecast period, 2021–2028. The growth of the market is attributed to the growing demand for customer easy accessibility in the banking sector all around the world.
Neobanking is a cutting-edge banking technology that offers users a complete online banking options. These banks are not similar to regular banks as neobanks do not have physical offices or branches. In addition, neobanking eliminates the need of visiting a bank for everything from account opening to other services. The need for human intervention is eliminated with the use of these platforms which is further resulting in fewer transaction-related errors.
However, as there is no physical location of neobanks and everything is done through online platforms, the client's expenses are significantly reduced. Additionally, neobanks are customer centric and provide tailored services to their customers that are initiated by technology. Furthermore, neobanks do not have their own bank license and rely on the bank partners to provide bank license administrations.
On the other hand, the financial environment shifts towards customer experience and fulfilment, a gap has opened up between traditional banks offerings and customers’ need & expectation. Therefore, neobanks are attempting to bridge that gap.
Due to the COVID-19 outbreak, the increasing reliance on internet services has accelerated the implementation of neo banking globally. The pandemic has had a positive impact on the global neobanking business. Long manual cycles, a terrible client experience, and laborious and low productivity are just a few of the problems that neobanks have promised to address.
According to the World Health Organization (WHO), individuals are advised to use contactless payment and avoid dealing with currency note as much as possible as the corona virus is predicted to remain for long periods of time on banknotes, hastening the disease's spread.
Market Trends, Drivers, Restraints, and Opportunities
- Ongoing amalgamation of advanced technology into banking services to provide digital transactions and personalized services to the customers are the key factors propelling the market growth during the forecast period.
- Increasing consumer preferences towards online banking and e-wallets, along with growing number of mobile users is expected to upsurge the market expansion in the coming years.
- Low-cost model for end-users along with several advantages such as, healthy interest rates and fast servicing is anticipated to fuel the market growth.
- Rising financial security breach and increasing financial fraudulent all around the world are the restraining factors hampering the market expansion in the coming years.
- Growing investment in technological advancements in the area of neobanking by key players in order to provide seamless financial services to its customers is expected to be a great opportunity for the market in the coming years.
Scope of the Report
The report on the global neobanking market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
Neobanking Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
Applications (Personal, Enterprises, and Others) and Account Types (Savings Account and Business Account)
Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
Key Players Covered in the Report
WeBank, Inc.; Atom Bank PLC; Ubank Ltd.; Monzo Bank Ltd.; Movencorp Inc.; Fidor Bank Ag; MyBank; Simple Finance Technology Corp.; N26 GmbH; and Revolut Ltd.
Market Segment Insights
Enterprise segment is expected to grow at a rapid pace
Based on applications, the global neobanking market is segmented into personal, enterprises, and others. The enterprise segment is expected to grow at a rapid pace during the forecast period, owing to the several beneficial enterprise-related services such as transaction management, asset management, and credit management.
Moreover, various services such as payments, bank statements, payables, and receivables, a number of neobanks provide dashboard solutions with significantly upgraded interfaces and vital information. Thus, above mentioned factors are fueling the segment growth during the forecast period.
However, the personal application segment is projected to expand at a considerable rate during the forecast period. The customers are steadily choosing neobanking services due to the rising penetration rate of smartphones, along with the convenience & ease of use. Furthermore, these services are provided by using mobile app interfaces that allow for money transfers and payments.
Business account segment is projected to expand at a considerable CAGR
On the basis of account types, the market is bifurcated into savings account and business account. The business account segment is projected to expand at a considerable CAGR during the forecast period due to the increasing adopting rate of neobanking as the preferred way of payment for bulk disbursements.
Moreover, neobanking models integrate banking into company’s activities with a developer-friendly banking application programming interface to help organizations to grow quickly. Business banking services bring all of the operations together under one roof, starting from banking to invoicing & automated bookkeeping.
On the other hand, the savings account segment is estimated to register a substantial market share in the coming years. The neobanking websites employ a user-friendly infrastructure that is specifically built to protect against cyberattacks and enhance the online savings account ecosystem. Furthermore, neobanks can also monitor the banking network and detect cyberattacks quickly. In addition, customers will be able to conduct international transactions in a more secure manner.
Europe is anticipated to constitute a key market share
In terms of regions, the global neobanking market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Europe is anticipated to constitute a key market share during the forecast period, owing to the rapid development of innovative technology along with the growing adoption of new technology in the region.
Moreover, organizations are concentrating on developing innovative product platforms and forming alliances in order to gain a large revenue share in the market. Several neobanks in the region have developed brick and mortar sales channels in order to establish an online to offline (O2O) form of distribution.
However, the market of Asia Pacific is projected to expand at a rapid pace in the coming years, owing to the increasing use of smartphones along with the expanding use of internet services. Furthermore, regulators around the region are gradually opening up neobanking systems in order to speed up the modernization & innovation through competition. Additionally, new vendors are likely to find opportunities in the region to launch highly relevant services with unmatched and reasonable price offering.
Segments Covered in the Report
The global neobanking market has been segmented on the basis of
- Savings Account
- Business Account
- Asia Pacific
- North America
- Latin America
- Middle East & Africa
- WeBank, Inc.
- Atom Bank PLC
- Ubank Ltd.
- Monzo Bank Ltd.
- Movencorp Inc.
- Fidor Bank Ag
- Simple Finance Technology Corp.
- N26 GmbH
- Revolut Ltd.
Some of the key players competing in the global neobanking market are WeBank, Inc.; Atom Bank PLC; Ubank Ltd.; Monzo Bank Ltd.; Movencorp Inc.; Fidor Bank Ag; MyBank; Simple Finance Technology Corp.; N26 GmbH; and Revolut Ltd.
These key players are applying various marketing strategies such as, partnerships, merger & acquisition, research and development, and geographical expansion in order to sustain the industry position in the market.
For example, in cooperation with Federal Bank, Google Pay has launched Fi, a neobank for salaried millennials, on April, 2021. In addition, AskFi, a financial partner, and Fit Rules, which stores, pays, or sets updates based on external events and triggers, are authorized to be used.
Moreover, there is no charge for exchanging information, and clients can choose to open a zero-balance account. The application's pleasant client experience is complemented by Federal Bank's safety, stability, and technological capability. Furthermore, Fi intends to be a big partner in the money making endeavor, enabling consumers to maximize funds and simplify investment savings.