Neobanks – purely digital banks with industry-leading functions that don't operate physical branches or rely on older backends – have exploded in the global scene in recent years.
Business Insider Intelligence
Increasing consumer interest in neobanks stimulates global competition and creates an increasingly competitive landscape that has prompted neobanks to introduce extravagant features such as overdraft protection and registration incentives.
Neobanks not only scale quickly according to the number of users, but also control the best way to profitability. Today, the average neobank loses $ 11 per user per accenture, and although the neobank's spending is partially offset by not operating expensive branch networks, they still need to find sustainable business models.
Some key strategies are beginning to unite: Most neo-banks operate on a "freemium" model, where they offer their product for free but charge additional features, while others offer multi-tier subscriptions with different premium accounts. In addition, other actors are targeting niche segments such as small businesses or gig economy employees to achieve profitability.
in the The global neo-banks Business Insider Intelligence is reportedly investigating how the neobank market has grown rapidly and what to expect when the industry changes from hyper-growth to sustainability. We discuss how 26 neobanks prioritize scaling versus profitability in key global markets, identify best practices that need to be emulated, and pitfalls that need to be avoided.
The companies mentioned in the report include: ABN Amro, Adyen, Ant Financial, ANZ, Aspiration, Banco Inter, Bank Leumi, Banco Sabadell, Banco Votorantim, Bnext, Bunq, Glockenspiel, Commonwealth Bank of Australia, Dave, Finleap, ING, Judo, Klar, Kuda, Mastercard, Monzo , Moven, MYbank, National Australia Bank, Neon, Nubank, N26, OakNorth, Open, Pfeffer, Penta, Revolut, Raising, Rabobank, Santander, Star, Standard Chartered, Tandem, TD Bank, TransferWise, Tencent, Uala, Uber, Volt , Varo, WeBank, Westpac, Xinja, 86 400.
Here are some key findings from the report:
- With an estimated 39 million users worldwide, neobank ratings have skyrocketed thanks to their attractive value propositions that include personal finance management features, low rates and superior user experiences.
- But the same traits that have helped neobanks prevail have kept profitability out of reach. Neobanks have been forced to introduce eye-catching features to differentiate themselves from users, and marketing these features has driven costs up.
- There is no universal path to profitability for neobanks – but there are some important categories. Freemium pricing strategies, multi-tier subscriptions, and targeted niche demographics are three strategies that neo-banks use to generate profits.
- Individual neo-bank landscapes vary by market, but their inherent advantages enable neo-banks to emerge in markets worldwide. Regional factors have made certain markets particularly mature, such as B. Fintech-friendly regulations, negative perception of established consumers by consumers and gaps in banking services for under-banked population groups.
In full the report:
- Dimensions the neo-bank market by value, number of users and number of accounts by 2024.
- Examines the factors that will drive the neo-bank market to new heights in the next five years and the challenge of achieving the profitability that will support this growth.
- Highlights key players in various global markets – including Europe, North America, Latin America, Asia Pacific, the Middle East and Africa – that are representative of the general neo-bank landscape and are distinguished by global presence, roles, users or overall funding.
- Introduces some of the smaller players that represent the emerging opportunity in a particular market.
- Explains how different neo-banks prioritize scaling over profitability, emulate best practices, and avoid pitfalls in key global markets.
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