The Neobanking Market size was valued at USD 103.54 billion in 2023 and is expected to grow to USD 3430.59 billion by 2031 and grow at a CAGR of 54.09% over the forecast period of 2024-2031.
Increased digitalisation in banking operations and growing demand for digital bank solutions are driving the growth of the global neobanking market. Moreover, the growth of the market is positively influenced by an increase in mobile banking usage. The growth of the neobank market is being hampered by security issues and privacy concerns, as well as high implementation costs.
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Market growth is projected to be driven by increased customer demand for convenience within the banking sector. Neobanks are offering banking solutions which do not require the presence of physically located branches or offices. Through online channels and mobile sites, they help users validate their service offering in real time. Moreover, the demand for neobank platforms is expected to increase further as more and more people around the world adopt smartphones and the Internet for online banking.
Key Drivers:
Increasing the use of digital banking activities
The banking landscape has changed as more and more people are becoming familiar with the use of electronic technologies such as cloud computing, Big Data & Artificial Intelligence AI. Moreover, the integration of these technologies with banking processes is helping to improve their visual capabilities, resolve customer enquiries and make complex data usable. The increasing use of smartphones and the internet for online banking throughout the world is projected to fuel demand for neobank systems.
Rapid adoption of neo banking platforms by micro, small and medium sized enterprises
Restraints:
Security matters and privacy concerns
One of the most important concerns associated with the implementation of the BPO is security. Market growth is hindered by a lack of awareness between banks on the sharing of account information and personal data online. Furthermore, the security and privacy of banks is greatly affected by the possibility of unauthorised access to users' accounts through hacked logins.
Opportunities:
Investments in the Fintech sector is increasing
To transform the management of financial institutions into a service provider for end users, and to provide automated solutions that are needed, finance companies have increased their investments in machine learning and artificial intelligence. Furthermore, the demand for industry specific solutions to meet business objectives of AI based financial solutions is growing as a result of increased complexity and competition in the neobanker market which are helping other sectors such as Fintech increase their own.
Increasing Demand for digital banking solutions
Challenges:
Data privacy and compliance with various legislation issues to hinder growth of the market
Challenges and risks, like cybercrimes or cyber-attacks which haunt the banking sector as well as other internet businesses, are holding back market growth. Malware, phishing attacks, distributed denials of service and insider threats are some of the hazards. Given the large amount of sensitive financial information that banks deal with, they are especially vulnerable to cybercrimes.
During economic downturns, investors tend to be more selective. It could become more difficult to secure funding for the neobanks that have not yet achieved profitability, which would hinder their development plans.
The conflict can lead to economic disturbances that affect various aspects of the economy, such as changes in consumer spending patterns, fluctuations in currency values, and shifts in interest rates. Neobanks may need to adapt their business models and risk management strategies to mitigate these economic impacts. Reduced consumer spending and Consumers are tightening their belts and cutting back as the economy slows down. This may lead to a fall in demand for ancillary services, such as budgeting and lifestyle management, which could have an impact on the smaller banks that focus on these features. Slower growth of bank accounts: people may be less likely to open new bank accounts, including those offered by neobanks, as they become more cautious about their finances
The offering of neobanks, which emphasise lower fees, budget tools and simpler access to financial services, could be more popular with consumers during a difficult time. Neobanks could take advantage of this opportunity and become a more efficient alternative to the traditional banks. Innovation for efficiency Neobanks may be encouraged to develop even more innovative and efficient financial products as a result of the slowdown. This would make them more attractive to customers who don't mind the cost. In terms of customer acquisition and investor confidence, the global slowdown is likely to be a challenge for new banks. But by focusing on value, innovation and efficiency, it can also be a chance for them to shine. From this period on, neobanks that can adapt to the changing economic landscape and prove their worth to cost conscious consumers could grow more powerful.
The bank loan portfolio has fallen by around 30% compared to prewar levels. More reforms and measures are needed to prepare the sector for its key role in driving Ukraine's economic revival, given that lending to the private sector is an essential element of capital investment recovery.
Ukraine's banking sector continues to demonstrate remarkable resilience and remains an essential element in the real economy after almost 20 months of full-scale war. There have been no bank runs, and access to cash has always been maintained even when the power went in October 2023. The capital adequacy ratio (CAR) is appropriately high, and the liquidity coverage ratio far exceeds required levels. Increased cyber security fears suggesting an increase in attacks against financial institutions have also added to concerns about cybersecurity, especially during the war. Neobanks, on the other hand, could be encouraged to step up their investment in cyber security. Overall, it seems that the crisis has had more of a dampening effect on neobank growth than any serious decline.
By Account Type
Business Account
Savings Account
The market has been divided between business account and savings accounts on the basis of account types. In 2023, the business account segment accounted for more than 66.1% of total revenue and was dominant. Neobanking is the preferred method of payment for bulk payments to various businesses around the world. In addition, the ability of neobank platforms to make it simple and easy for suppliers and other interested parties to receive payments from them by means of a reduction in administrative intervention.
By Application
Enterprises
Personal
Others
The market has been divided into enterprises, individuals and others on the basis of applications. In 2023, the enterprise segment dominated the market, accounting for over 52.3% of total revenue. These platforms provide business services, for example credit management, transaction management and asset management.
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In 2023, the Europe region took over as the largest market in the world, accounting for more than 35.2% of total revenue. The development of a number of innovative technologies and the early adoption of new ones can also be attributed to regional market growth. In addition, in order to increase their market position, companies are focusing on the creation of product platforms and partnerships.
The Asia Pacific region, during the forecast period, is projected to become the most rapidly growing individual market. Market growth is expected to be driven by the growing use of internet services, together with an increase in mobile phone usage. Moreover, the growth of the regional market is expected to be further supported by factors such as easy and convenient banking services and the rise of digital banks.
REGIONAL COVERAGE:
North America
US
Canada
Mexico
Europe
Eastern Europe
Poland
Romania
Hungary
Turkey
Rest of Eastern Europe
Western Europe
Germany
France
UK
Italy
Spain
Netherlands
Switzerland
Austria
Rest of Western Europe
Asia Pacific
China
India
Japan
South Korea
Vietnam
Singapore
Australia
Rest of Asia Pacific
Middle East & Africa
Middle East
UAE
Egypt
Saudi Arabia
Qatar
Rest of Middle East
Africa
Nigeria
South Africa
Rest of Africa
Latin America
Brazil
Argentina
Colombia
Rest of Latin America
The key players in the Neobanking Market are Atom Bank Plc, BBVA S.A., BMTX, Inc., Chime Financial, Inc., Citigroup Inc., Dave, Inc., Deutsche Bank AG, Digibank (DBS Bank Ltd.), Equitable Bank, HSBC Holdings Plc. & Other Players
October 2023: Neobank PoetrYY has entered into a partnership with Mbanq to provide digital finance solutions to entrepreneurs, underserved communities, individuals and SMEs.
In October 2022, a Rajasthan based Kitzone Neo Bank will launch India's First Assured Cashback Debit Card, which also supplies mini-ATMs and POS terminals.
| Report Attributes | Details |
| Market Size in 2023 | US$ 103.54 billion |
| Market Size by 2031 | US$ 3430.59 billion |
| CAGR | CAGR of 54.09 % From 2024 to 2031 |
| Base Year | 2023 |
| Forecast Period | 2024-2031 |
| Historical Data | 2020-2022 |
| Report Scope & Coverage | Market Size, Segments Analysis, Competitive Landscape, Regional Analysis, DROC & SWOT Analysis, Forecast Outlook |
| Key Segments | • By Account Type (Business Account, Savings Account) • By Application (Enterprises, Personal, Others) |
| Regional Analysis/Coverage | North America (US, Canada, Mexico), Europe (Eastern Europe [Poland, Romania, Hungary, Turkey, Rest of Eastern Europe] Western Europe] Germany, France, UK, Italy, Spain, Netherlands, Switzerland, Austria, Rest of Western Europe]), Asia Pacific (China, India, Japan, South Korea, Vietnam, Singapore, Australia, Rest of Asia Pacific), Middle East & Africa (Middle East [UAE, Egypt, Saudi Arabia, Qatar, Rest of Middle East], Africa [Nigeria, South Africa, Rest of Africa], Latin America (Brazil, Argentina, Colombia, Rest of Latin America) |
| Company Profiles | Atom Bank Plc, BBVA S.A., BMTX, Inc., Chime Financial, Inc., Citigroup Inc., Dave, Inc., Deutsche Bank AG, Digibank (DBS Bank Ltd., Equitable Bank, HSBC Holdings Plc. |
| Key Drivers | • Over the forecast period, the global neobanking market is predicted to rise due to an increase in demand for consumer convenience in the banking industry. |
| Market Opportunities | • During the market projection period, the IT department, which serves numerous sectors globally and locally, will be heavily reliant. |
Ans: The expected CAGR of the Neobanking Market is 54.09% during the forecast period of 2024-2031
Ans: The Covid-19 pandemic affected the Neobanking Market significantly. The detailed analysis is included in the final report.
Ans: The market size of the Neobanking Market is expected to reach USD 3430.59 billion by 2031
Ans: European region dominated the Neobanking Market.
Ans: The leading Neobanking Market players include Atom Bank Plc, BBVA S.A., BMTX, Inc., Chime Financial, Inc., Citigroup Inc., Dave, Inc., Deutsche Bank AG, Digibank (DBS Bank Ltd., Equitable Bank, and HSBC Holdings Plc.
TABLE OF CONTENTS
1. Introduction
1.1 Market Definition
1.2 Scope
1.3 Research Assumptions
2. Industry Flowchart
3. Research Methodology
4. Market Dynamics
4.1 Drivers
4.2 Restraints
4.3 Opportunities
4.4 Challenges
5. Impact Analysis
5.1 Impact of Russia-Ukraine Crisis
5.2 Impact of Economic Slowdown on Major Countries
5.2.1 Introduction
5.2.2 United States
5.2.3 Canada
5.2.4 Germany
5.2.5 France
5.2.6 UK
5.2.7 China
5.2.8 Japan
5.2.9 South Korea
5.2.10 India
6. Value Chain Analysis
7. Porter’s 5 Forces Model
8. Pest Analysis
9. Neobanking Market Segmentation, By Account Type
9.1 Introduction
9.2 Trend Analysis
9.3 Business Account
9.4 Savings Account
10. Neobanking Market Segmentation, By Application
10.1 Introduction
10.2 Trend Analysis
10.3 Enterprises
10.4 Personal
10.5 Others
11. Regional Analysis
11. Regional Analysis
11.1 Introduction
11.2 North America
11.2.1 USA
11.2.2 Canada
11.2.3 Mexico
11.3 Europe
11.3.1 Eastern Europe
11.3.1.1 Poland
11.3.1.2 Romania
11.3.1.3 Hungary
11.3.1.4 Turkey
11.3.1.5 Rest of Eastern Europe
11.3.2 Western Europe
11.3.2.1 Germany
11.3.2.2 France
11.3.2.3 UK
11.3.2.4 Italy
11.3.2.5 Spain
11.3.2.6 Netherlands
11.3.2.7 Switzerland
11.3.2.8 Austria
11.3.2.9 Rest of Western Europe
11.4 Asia-Pacific
11.4.1 China
11.4.2 India
11.4.3 Japan
11.4.4 South Korea
11.4.5 Vietnam
11.4.6 Singapore
11.4.7 Australia
11.4.8 Rest of Asia Pacific
11.5 The Middle East & Africa
11.5.1 Middle East
11.5.1.1 UAE
11.5.1.2 Egypt
11.5.1.3 Saudi Arabia
11.5.1.4 Qatar
11.5.1.5 Rest of the Middle East
11.5.2 Africa
11.5.2.1 Nigeria
11.5.2.2 South Africa
11.5.2.3 Rest of Africa
11.6 Latin America
11.6.1 Brazil
11.6.2 Argentina
11.6.3 Colombia
11.6.4 Rest of Latin America
12. Company Profiles
12.1 Atom Bank Plc
12.1.1 Company Overview
12.1.2 Financial
12.1.3 Products/ Services Offered
12.1.4 SWOT Analysis
12.1.5 The SNS View
12.2 BBVA S.A.
12.2.1 Company Overview
12.2.2 Financial
12.2.3 Products/ Services Offered
12.2.4 SWOT Analysis
12.2.5 The SNS View
12.3 BMTX, Inc.
12.3.1 Company Overview
12.3.2 Financial
12.3.3 Products/ Services Offered
12.3.4 SWOT Analysis
12.3.5 The SNS View
12.4 Chime Financial, Inc.
12.4.1 Company Overview
12.4.2 Financial
12.4.3 Products/ Services Offered
12.4.4 SWOT Analysis
12.4.5 The SNS View
12.5 Citigroup Inc.
12.5.1 Company Overview
12.5.2 Financial
12.5.3 Products/ Services Offered
12.5.4 SWOT Analysis
12.5.5 The SNS View
12.6 Dave, Inc.
12.6.1 Company Overview
12.6.2 Financial
12.6.3 Products/ Services Offered
12.6.4 SWOT Analysis
12.6.5 The SNS View
12.7 Deutsche Bank AG
12.7.1 Company Overview
12.7.2 Financial
12.7.3 Products/ Services Offered
12.7.4 SWOT Analysis
12.7.5 The SNS View
12.8 Digibank (DBS Bank Ltd.)
12.8.1 Company Overview
12.8.2 Financial
12.8.3 Products/ Services Offered
12.8.4 SWOT Analysis
12.8.5 The SNS View
12.9 Equitable Bank
12.9.1 Company Overview
12.9.2 Financial
12.9.3 Products/ Services Offered
12.9.4 SWOT Analysis
12.9.5 The SNS View
12.10 HSBC Holdings Plc.
12.10.1 Company Overview
12.10.2 Financial
12.10.3 Products/ Services Offered
12.10.4 SWOT Analysis
12.10.5 The SNS View
13. Competitive Landscape
13.1 Competitive Benchmarking
13.2 Market Share Analysis
13.3 Recent Developments
13.3.1 Industry News
13.3.2 Company News
13.3.3 Mergers & Acquisitions
14. Use Case and Best Practices
15. Conclusion
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