Neobanking Global Market Report 2024

Neobanking pertains to digital banks that operate without physical locations and cater primarily to tech-savvy clients. These digital banks offer a wide array of financial services, predominantly in digital and mobile formats, encompassing payments, debit cards, money transfers, lending, and more.

The primary types of business accounts in the neobanking market encompass business accounts and savings accounts. Business accounts within neobanking services cater to business account holders, facilitating the management of funds, bulk pay-outs, credits, detailed account insights, and international transfers. Neobanking services cover a range of offerings, including mobile banking, payments and money transfers, checking/savings accounts, loans, and other financial services. These services find application across enterprises, personal use, and other sectors.

The neobanking market research report is one of a series of new reports from The Business Research Company that provides neobanking market statistics, including Feed yeast industry global market size, regional shares, competitors with a neobanking market share, detailed neobanking market segments, market trends and opportunities, and any further data you may need to thrive in the neobanking industry. These neobanking market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The neobanking market size has grown exponentially in recent years. It will grow from $118.57 billion in 2023 to $176.6 billion in 2024 at a compound annual growth rate (CAGR) of 48.9%. Historical growth can be attributed to consumer demand for convenience and cost-efficiency, the regulatory environment, globalization facilitating cross-border transactions, initiatives promoting financial inclusion, and the utilization of big data.

The neobanking market size is expected to see exponential growth in the next few years. It will grow to $836.11 billion in 2028 at a compound annual growth rate (CAGR) of 47.5%. Anticipated growth in the forecast period is driven by open banking initiatives, the emergence of embedded finance, the ascent of challenger banks, diversification in product offerings, and expansion beyond core banking services. Major trends expected in this period include the integration of open banking platforms, partnerships with fintech and tech giants, the utilization of AI and machine learning for personalized finance, the incorporation of virtual and contactless banking features, and a customer-centric approach within the industry.

The increasing demand for digitalization among banking institutions globally is playing a significant role in driving the growth of the neobanking market. Digital banking involves the comprehensive digitization of all banking processes and the substitution of physical bank branches with a continuous online presence, eliminating the need for customers to visit a physical location. This transformation automates traditional financial services, allowing customers to access banking products and services online or through electronic platforms. Neobanking facilitates the digitization of banks by enabling financial institutions to operate online without physical branches, offering digital equivalents of traditional banking services. Leveraging technologies such as artificial intelligence (AI), automation, and cloud computing, neobanks provide highly personalized services at reduced costs. According to a 2021 survey conducted by McKinsey and Company, the adoption of digital banking in Asia-Pacific developing countries increased significantly from 2017 to 2021, reaching 88% in 2021. As a result, the growing demand for digitalization in the banking sector is expected to drive the continued expansion of the neobanking market.

The increasing penetration of smartphones is poised to significantly boost the growth of the neobanking market in the coming years. A smartphone, combining traditional mobile phone features with advanced computing capabilities, is a key enabler for the growth of neobanking. The neobanking market is experiencing substantial expansion driven by the widespread adoption of smartphones. This trend facilitates broader access to digital financial services through mobile apps, allowing neobanks to cater to a larger audience with convenient on-the-go banking experiences, thereby accelerating market adoption. For example, a February 2023 report from Uswitch Limited, a UK-based online and telephone comparison and switching service, highlighted the presence of 71.8 million active mobile connections in 2022, reflecting a 3.8% growth from the previous year. The projection for 2025 indicates a UK population of 68.3 million, with an anticipated 95% smartphone penetration among residents. This surge in smartphone penetration is a key driving force behind the growth of the neobanking market.

Technological advancement is a pivotal trend propelling the neobanking market, with a specific focus on the integration of artificial intelligence (AI) in neobanking services and solutions to enhance efficiency. AI plays a crucial role in delivering highly personalized solutions to consumers, offering logical reminders and notifications that facilitate money-saving and overall convenience. Its applications extend to credit decisions, risk management, trading, and the provision of personalized services. In March 2021, DigiBankASIA, a Singapore-based financial services company, formed a partnership with Xebia to introduce UnoBank, Asia's digital bank. Xebia, a US-based IT consultancy company, serves as UNO's digital and innovative technology partner in developing Cognito, UNO's digital-first platform. Leveraging expertise in technologies such as AI/ML, IoT, AR/VR, Cloud, DevOps, Big Data & Analytics, Xebia is strategically positioned to build a cutting-edge and intelligent customer experience (CX) platform for UNOBank. This collaboration aims to provide a distinctive and advanced digital foundation, incorporating top banking products into UNO's offerings.

Prominent companies in the neobanking market are actively engaged in developing innovations, specifically neobanking products, to cater to larger customer bases, increase sales, and boost overall revenue. Neobanking products are financial services or solutions offered by digital-only or online-based banking institutions, known as neobanks. An example of such innovation is the launch of Sendwave Pay by Zepz, a UK-based payments firm, in June 2023. Sendwave Pay streamlines the process of sending funds to Africa and stands out by offering an FDIC-insured bank account coupled with a debit card. Account holders enjoy significant cost savings, with the potential to save up to 25% on transaction fees for remittances to countries such as Kenya, Ghana, and various other African nations. The unique benefits extend to international transactions, as users receive reimbursements for fees incurred when using their Sendwave Pay debit card outside the US. Additionally, account holders can earn monthly interest of up to 0.51% on the funds held in their Sendwave Pay account, providing a comprehensive and advantageous financial solution.

In December 2021, Open, a neobank based in India that integrates banking, payments, accounting, expense management, and taxes into a unified platform, completed the acquisition of Finin for a sum of $10 million. This strategic move enhances Open's cloud-native BankingStack financial operating system, empowering banks and financial institutions to introduce and expand their digital banking services for both individual and enterprise clients. The acquisition not only contributes to Open's capabilities in offering salary accounts and an integrated payroll module but also facilitates the growth of Small and Medium Enterprises (SMEs) utilizing the Open SME neo-banking platform. Finin, an India-based neobanking platform focused on simplifying money management, brings its expertise to further strengthen Open's position in the digital banking landscape.

Major companies operating in the neobanking market report are Wells Fargo & Company, U.S. Bancorp, TD Ameritrade Holding Corporation, Webank Inc., Nubank, Chime Financial Inc., SoFi Technologies Inc., Green Dot Corporation, Robinhood Markets Inc., Revolut Ltd., Upgrade Inc., Monzo Bank Ltd., Aspiration Inc., Tangerine Bank, N26 GmbH, Starling Bank Ltd., Personal Capital LLC, Radius Financial LLC, Ubank Limited, Betterment LLC, Bunq BV, Stash Invest LLC, Wealthfront Corporation, Simple Finance Technology Corp., Daylight Financial Corp., Vivid Money GmbH, Monese Ltd., Varo Money Inc., Current Financial Inc., Acorns Grow Inc., JPMorgan Chase & Co.

Western Europe was the largest region in the neobanking market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the neobanking market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the neobanking market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The neobanking market includes revenues earned by entities by a full stack neobank or a front-end focused neobank. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

Neobanking Global Market Report 2024 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.

This report focuses on neobanking market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.

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Where is the largest and fastest growing market for neobanking ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The neobanking market global report from the Business Research Company answers all these questions and many more.

The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.

• The market characteristics section of the report defines and explains the market.
• The market size section gives the market size ($b) covering both the historic growth of the market, and forecasting its development.
• The forecasts are made after considering the major factors currently impacting the market. These include:

The impact of sanctions, supply chain disruptions, and altered demand for goods and services due to the Russian Ukraine war, impacting various macro-economic factors and parameters in the Eastern European region and its subsequent effect on global markets.

The impact of higher inflation in many countries and the resulting spike in interest rates.

The continued but declining impact of covid 19 on supply chains and consumption patterns.

• Market segmentations break down the market into sub markets.
• The regional and country breakdowns section gives an analysis of the market in each geography and the size of the market by geography and compares their historic and forecast growth. It covers the growth trajectory of COVID-19 for all regions, key developed countries and major emerging markets.
• The competitive landscape chapter gives a description of the competitive nature of the market, market shares, and a description of the leading companies. Key financial deals which have shaped the market in recent years are identified.
• The trends and strategies section analyses the shape of the market as it emerges from the crisis and suggests how companies can grow as the market recovers.

Scope

Markets Covered:

• 1) By Account Type: Business Account; Savings Account
• 2) By Service: Mobile Banking; Payments And Money Transfer; Checking/Savings Account; Loans; Other Services
• 3) By Application: Enterprises; Personal; Other Application
• Companies Mentioned: Wells Fargo & Company; U.S. Bancorp; TD Ameritrade Holding Corporation; Webank Inc.; Nubank
• Countries: Australia; Brazil; China; France; Germany; India; Indonesia; Japan; Russia; South Korea; UK; USA; Canada; Italy; Spain
• Regions: Asia-Pacific; Western Europe; Eastern Europe; North America; South America; Middle East; Africa
• Time series: Five years historic and ten years forecast.
• Data: Ratios of market size and growth to related markets, GDP proportions, expenditure per capita,
• Data segmentations: country and regional historic and forecast data, market share of competitors, market segments.
• Sourcing and Referencing: Data and analysis throughout the report is sourced using end notes.
• Delivery format: PDF, Word and Excel Data Dashboard.