Emphasis on Account Type (Business Accounts and Savings Accounts.); Services (Mobile Banking, Payments, Money Transfer, Savings and Investments, Loans, and Others); Application Type (Enterprise, Personal, and Others); and Region/Country
The Neo-Banking Market was valued at USD 72,000 Million and is expected to grow at a strong CAGR of around 35.8% during the forecast period (2023-2030) owing to growing financial digitalization.
The primary reason for the rapid growth of neo-banks is the convenience they offer. With 24/7 access to services through mobile apps, customers can manage their finances anytime, anywhere. Furthermore, Neo banks often have lower operating costs compared to traditional banks due to their lack of physical branches.
Furthermore, this high growth is also fueled by the conducive government support to this industry as well. Governments in various countries have recognized the potential of fintech innovation and have introduced regulatory sandboxes to foster the growth of neo-banking startups. This supportive regulatory environment has encouraged entrepreneurs and investors to enter this market.
Moreover, in 2021, Stripe, a global payments processing platform, raised USD S600 million in a funding round, valuing the company at USD 95 billion, underscoring investor confidence in fintech companies, and , companies like Chime in the U.S. and Revolut in Europe have gained traction by offering services tailored to millennials and frequent travelers.
This section discusses the key market trends that are influencing the various segments of the Neo Banking Market as identified by our team of research experts.
Mobile Banking Services is Transforming Industry
The application that generates the maximum revenue for neo-banks is mobile banking. With the increasing adoption of smartphones and the growing importance of digital transactions, mobile banking has become an indispensable tool for customers seeking convenience and accessibility in managing their finances. Neo banks have capitalized on this trend by delivering seamless and user-friendly mobile banking experiences that cater to modern-day financial needs. Furthermore, several factors have contributed to the high acceptability of the new mobile banking services among consumers, such as a user-friendly interface. For instance, Neo banks prioritize user experience, offering intuitive interfaces that make it easy for customers to navigate through various banking services. The simplicity and convenience of mobile banking applications enhance customer satisfaction and loyalty. Moreover, the accessibility and the security features that the neo banking provides to their consumers build trust among the consumers, and the level of accessibility, allowing consumers to access their accounts anytime and anywhere is a key driver of consumer retention for the neo banks. For instance, Brazil has become one of the fastest-growing regions for neo-banking, supported by the push towards digitization of the Brazilian economy. As of 2023, a significant portion of the Brazilian population specifically about 43% have a neo-bank account. NuBank, the largest neo bank in Brazil, has experienced remarkable growth with a user base exceeding 48 million, evidently securing the second largest investment of about USD 4.1 billion over time since 2012.
Europe holds the significant portion of Neo Banking in terms of market share
Within Europe, the Germany holds a major share of the market. The major factors boosting the market’s growth in the country are its conducive financial regulatory environment helping the industry to thrive at an unprecedented rate.
According to the European Union’s Payment Services Directive 2 (PSD2) launched in 2017 in Europe, has played a pivotal role in fostering innovation and competition in the financial sector by enhancing and regulating electronic payment services by allowing third-party access to banking data through open banking APIs.
Furthermore, the collaborative ecosystem in Europe amongst fintech, traditional banks, and regulatory bodies has laid down a very favorable environment for the neo-banking industry to thrive in the region. For instance, the partnership between the neo-banking services providers and the traditional banks has enabled these digital-only banks to expand fast and grow their consumer base at a rapid rate.
The Neo-Banking Market is competitive and fragmented, with the presence of several global and international market players. The key players are adopting different growth strategies to enhance their market presence, such as partnerships, agreements, collaborations, new product launches, geographical expansions, and mergers and acquisitions. Some of the major players operating in the market are N26 AG; Revolut Ltd; Chime Financial, Inc; Monzo, Inc; Starling Bank; Varo Bank, N.A; Atom bank; Monese Ltd; The Goldman Sachs Group, Inc.; and Tandem Bank.
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1. Market Introduction
2. Research Methodology Or Assumption
3. Market Synopsis
4. Executive Summary
5. Impact Of Covid-19 On The Neo Banking Market
6. Neo Banking Market Revenue (usd Bn), 2020-2030f.
7. Market Insights By Account Type
8. Market Insights By Services
9. Market Insights By Application Type
10. Market Insights By Region
11. Neo Banking Market Dynamics
12. Neo Banking Market Opportunities
13. Neo Banking Market Trends
14. Demand And Supply-side Analysis
15. Value Chain Analysis
16. Competitive Scenario
17. Company Profiled
18. Disclaimer
Analyzing the historical market, estimating the current market, and forecasting the future market of the global Neo Banking market were the three major steps undertaken to create and analyze the adoption of Neo Banking in major regions globally. Exhaustive secondary research was conducted to collect the historical market numbers and estimate the current market size. Secondly, to validate these insights, numerous findings and assumptions were taken into consideration. Moreover, exhaustive primary interviews were also conducted, with industry experts across the value chain of the global Neo Banking market. Post assumption and validation of market numbers through primary interviews, we employed a top-down/bottom-up approach to forecasting the complete market size. Thereafter, market breakdown and data triangulation methods were adopted to estimate and analyze the market size of segments and sub-segments of the industry pertains to. Detailed methodology is explained below:
Step 1: In-Depth Study of Secondary Sources:
A detailed secondary study was conducted to obtain the historical market size of the Neo Banking market through company internal sources such as annual reports & financial statements, performance presentations, press releases, etc., and external sources including journals, news & articles, government publications, competitor publications, sector reports, third-party database, and other credible publications.
Step 2: Market Segmentation:
After obtaining the historical market size of the Neo Banking market, we conducted a detailed secondary analysis to gather historical market insights and share for different segments & sub-segments for major regions. Major segments are included in the report as account type, services, and application type. Further country-level analyses were conducted to evaluate the overall adoption of testing models in that region.
Step 3: Factor Analysis:
After acquiring the historical market size of different segments and sub-segments, we conducted a detailed factor analysis to estimate the current market size of the Neo Banking market. Further, we conducted factor analysis using dependent and independent variables such as account type, services, and application type of the Neo Banking market. A thorough analysis was conducted of demand and supply-side scenarios considering top partnerships, mergers and acquisitions, business expansion, and product launches in the Neo Banking market sector across the globe.
Current Market Sizing: Based on actionable insights from the above 3 steps, we arrived at the current market size, key players in the global Neo Banking market, and market shares of the segments. All the required percentage shares split and market breakdowns were determined using the above-mentioned secondary approach and were verified through primary interviews.
Estimation & Forecasting: For market estimation and forecast, weights were assigned to different factors including drivers & trends, restraints, and opportunities available for the stakeholders. After analyzing these factors, relevant forecasting techniques i.e., the top-down/bottom-up approach were applied to arrive at the market forecast for 2030 for different segments and sub-segments across the major markets globally. The research methodology adopted to estimate the market size encompasses:
Primary Research: In-depth interviews were conducted with the Key Opinion Leaders (KOLs) including Top Level Executives (CXO/VPs, Sales Head, Marketing Head, Operational Head, Regional Head, Country Head, etc.) across major regions. Primary research findings were then summarized, and statistical analysis was performed to prove the stated hypothesis. Inputs from primary research were consolidated with secondary findings, hence turning information into actionable insights.
Market Engineering
The data triangulation technique was employed to complete the overall market estimation and to arrive at precise statistical numbers for each segment and sub-segment of the global Neo Banking market. data was split into several segments & sub-segments after studying various parameters and trends in the areas of purity and application in the global Neo Banking market.
The current & future market trends of the global Neo Banking market were pinpointed in the study. Investors can gain strategic insights to base their discretion for investments on the qualitative and quantitative analysis performed in the study. Current and future market trends determined the overall attractiveness of the market at a regional level, providing a platform for the industrial participant to exploit the untapped market to benefit from a first-mover advantage. Other quantitative goals of the studies include:
Q1: What is the current market size and growth potential of the global Neo Banking market?
Q2: What are the driving factors for the growth of the global Neo Banking Market?
Q3: Which segment is the fastest growing of the global Neo Banking market by service type?
Q4: What are the emerging technologies and trends in the global Neo Banking market?
Q5: Which region will be the fastest-growing global Neo Banking market?
Q6: Who are the key players in the global Neo Banking market?
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