A new breed of digital-only neo banks is rising frequently to capitalize on indignation stroke towards the industry’s requisites. The major characteristics that lead to the growth of neo banks are accessibility, cost-effective multiple banking, and financial functionalities under one roof. Apart from these, even fintech companies are introducing IT solutions that are mainly focused on manual labours and the underserved needs of limited credit data on MSMEs.
In 2018, the neo banks across the globe were valued at $18.6 billion. However, in the year 2019 to 2026, it is claimed that the value may increase with a double-digit CAGR of 46%. Specifically, in European neo banks, the customer base has raised by more than 15 million. According to the research by AT Kearney, the European neo banks could have up to 85 million customers by 2023.
For instance, N26- the largest valued neo bank in Europe, has expanded its operations into 17 different countries since its inception. At present, Revolut and N26 are the best performing neo banks in Europe based on userbase. A recent survey illustrates that if these two banks continue their current trends, they could see a combined total of nearly 24 million customers by December 2020. As both banks continue to expand their operations into new countries, the customer numbers are likely to rise. Till now the European market has not been majorly shattered. But, this picture could change, if neo banks introduce more impressive models and traditional banks continue to lag technological developments.