"Smart Strategies, Giving Speed to your Growth Trajectory"

Neobanking Market Size, Share & Industry Analysis, By Account Type (Personal and Business), By Service (Savings/Checking Accounts, Payments & Money Transfers, Mobile Banking, Loans/Insurance/Investments, and Others), and Regional Forecast, 2024 – 2032

Last Updated: June 24, 2024 | Format: PDF | Report ID: FBI109076

 

KEY MARKET INSIGHTS

Play Audio Listen to Audio Version

The global neobanking market size was valued at USD 98.40 billion in 2023. The market is projected to grow from USD 143.29 billion in 2024 to USD 3,406.47 billion by 2032, exhibiting a CAGR of 48.6% during the forecast period.


Neobanks are digital-only banking platforms that operate online and do not have a physical presence. They enhance the traditional banking experience with a seamless online experience, leveraging technology for user-friendly account creation (business account and savings) and providing hassle-free access to various services without the need for physical branches. Neobanks facilitate deposits and withdrawals, issue debit cards, provide investment opportunities, and extend credit and lending services. However, most neobanks do not have a standalone banking license and often collaborate with licensed banks to offer financial services. The market is driven by the growing demand for digitalization of banking activities, digital banking services, a rise in investments in the fintech industry, increased regulatory support, favorable digital public infrastructure, and other factors.


The COVID-19 pandemic acted as a catalyst, creating an environment conducive to neobanks as they efficiently managed onboarding and essential services remotely. Moreover, the pandemic accelerated the proliferation of smartphones in the digitalization trend. Consumers have increasingly incorporated digital technologies into their lifestyles, embracing digital payments, investment tech, online-only insurance, and other facets of the evolving digital landscape.


GENERATIVE AI IMPACT


Leveraging and Integrating Generative AI in Neobanks to Enhance Operations and Create Market Opportunities


Artificial Intelligence (AI) allows neobanks to strengthen customer relationships and enhance financial performance. Beyond adopting an AI-first mindset, neobanks must ensure that these AI capabilities yield tangible business value. Many leading neobanks globally have effectively harnessed AI. For instance, in December 2023, Neobank Bunq launched generative artificial intelligence (AI) into its platform, launching Finn, a generative AI tool available to 11 million users. It switches the search function on Bunq’s app, enabling consumers to plan their budget, finances, find transactions, and navigate the platform.


Moreover, AI-powered neobanks are diligent in monitoring engagement performance, dedicating teams to analyzing metrics such as average daily customer app usage time and monthly active users. In addition, such banks are replacing traditional forms with conversational designs, employing chatbots, voice assistants, and live video consultations. China’s Webank is extensively using AI in user interactions, claiming that nearly 98% of customer queries are effectively handled by AI-powered chatbots.


Thus, this strategic integration of AI optimizes user experience and positions neobanks for sustainable growth and competitiveness in the financial landscape.


Neobanking Market Trends


Rising Integration of Cryptocurrencies and Blockchain Technology in Neobanking Platforms to Bolster Market Growth


Some neobanks are implementing cryptocurrencies and blockchain technology, empowering users to manage their digital assets directly within the neobanking app. With the continuous expansion and evolution of the cryptocurrency market, coupled with the neobanks’ pursuit of competitive advantages, it is anticipated that more neobanks will adopt cryptocurrencies in the near future.


Moreover, the neobanking sector is actively exploring cryptocurrencies and blockchain to facilitate faster, more cost-effective, and secure transactions. The ongoing influence of innovative cryptocurrency wallet app solutions further contributes to this trend. Numerous banks have already integrated cryptocurrencies into their neobank platforms, allowing customers to seamlessly engage in buying, selling, and holding digital assets. For instance, Revolut stands out by enabling users to effortlessly transact in crypto with transparent transactions and no hidden fees. Similarly, SEBA, a Swiss neobank, empowers its customers to transact with cryptocurrencies, including buying, selling, and securely storing digital assets, all through its user-friendly app.


Request a Free sample to learn more about this report.


Neobanking Market Growth Factors


Rapid Adoption of Neobanking Platforms among MSMEs, Micro and Small Businesses to Drive Market Growth


The considerable growth potential for neobanks is driven by their cost-effective model offering end consumers minimal to no monthly fees for services such as maintaining minimum balances, deposits, and withdrawals. They provide services such as credit management, transaction management, and asset management. Additionally, features such as effortless account setup, seamless transactions, and innovative creditworthiness assessment methods appeal to micro and small businesses. Moreover, the neobanking market growth is driven by the rapid adoption of millennials, MSMEs, as well as individuals with sporadic incomes. Embracing innovative technologies and a surge in consumerism further contribute to their success, capturing the interest of venture capitalists, investors, and corporations.


Factors such as advanced loan approval and funding, coupled with lower interest rates through banking applications, are driving market growth. Furthermore, the increasing adoption of digital technologies such as cloud, big data, and artificial intelligence has transformed the banking industry landscape. For instance, in January 2023, Temenos launched an AI-driven corporate lending solution to consolidate global commercial loan portfolios on their banking platform.


RESTRAINING FACTORS


Data Privacy and Compliance with Various Regulations Issues to Impede Market Growth


The market growth is impeded by challenges and risks such as cybercrimes and hacking, which haunt the banking industry and others online businesses. Some of the threats include malware attacks, phishing attacks, Distributed Denial of Service (DDoS) attacks, and insider threats. The banking sector is particularly susceptible to cybercrimes owing to the vast amount of sensitive financial information it handles, leading to unauthorized exposure with consequential impacts.


Moreover, compliance with various regulations poses a challenge for neobanks. Similar to traditional counterparts, neobanks are obligated to adhere to the same regulations, a process that can prove both time-consuming and resource-intensive.


Neobanking Market Segmentation Analysis


By Account Type Analysis


Business Account Segment Dominates Market Share, Fueled by Demand for Streamlined Financial Services


Based on the account type, the market is divided into personal and business account types.


The business account segment holds the highest share of the market owing to the increasing demand for streamlined financial services among businesses. Neobanks cater to the unique needs of enterprises, such as expense tracking, invoicing, and integrations with business tools, making them essential for efficient financial management.


The personal account types segment is expected to grow with the highest CAGR in the forecasted period. The increasing demand among individuals for digital banking solutions drives the segment.


By Service Analysis


To know how our report can help streamline your business, Speak to Analyst


Neobanks Focus on Savings/Checking Accounts, Catering to Essential Needs of Users for Transactions and Interest Earning


Based on service, the market is divided into savings/checking accounts, payments & money transfers, mobile banking, loans/insurance/investments, and others.


The savings/checking accounts segment holds the largest share in the global market. Neobanks often prioritize opening and managing savings/checking accounts as they are essential for users, providing a foundation for managing money, making transactions, and earning interest.


The mobile banking segment is estimated to hold the highest CAGR owing to the increasing adoption of smartphones and the convenience they offer. Also, advancements in technology, security measures, and user-friendly interfaces enhance the overall mobile banking experience.


REGIONAL INSIGHTS


We have studied the market across North America, South America, Europe, Asia Pacific, and the Middle East & Africa.


Europe Neobanking Market Size, 2023 (USD Billion)

To get more information on the regional analysis of this market, Request a Free sample


Europe holds the highest global neobanking market share, driven by factors such as growing opportunities for innovative fintech solutions, adoption of disruptive technology, and growing partnerships with major incumbent financial institutions. According to the U.K. Fintech industry report, 2022, the FinTech industry in the U.K. consists of over 1,600 firms, and this number is likely to double by 2030. Furthermore, the region is witnessing an increasing number of investments into Fintech companies. The total investments into Fintech companies in the U.K. market reached around USD 24.5 billion during the first half of 2021.


Asia Pacific is expected to grow with the highest CAGR owing to minimum operating cost, extensive use of artificial intelligence, and technological leverage in the region. Venture capital and private entities investors are keenly observing opportunities in this region for Neo-banking platforms. Moreover, the emphasis on digital transformation and adoption of mobile banking, combined with the financial and credit needs of both retail segments and MSMEs, presents vital market opportunities for neobanks in the APAC region. According to a report by a fintech research firm in 2020, the smartphone penetration rate of India was 54%, which is expected to grow to 96% by 2040. This displays the potential neobanks have in India in the coming years.


North America holds the highest market share after Europe, owing to the growing adoption of advanced technologies such as artificial intelligence and the Internet of Things. Neobanks use these technologies to carry out a wide range of banking operations, boosting the efficiency of various banking products offered by financial institutions. Moreover, key players in the region are focusing on SMEs and new businesses. For instance, in October 2022, California-based neobank, Winden received funding of USD 5.3 million. The neobank offers banking services and products for SEMs and entrepreneurs.


Similarly, the Middle East & Africa, and South America are projected to grow potentially over the years. The growth is attributed to a growing reliance on online banking services in the region. According to a Digital Banking in the Middle East, 2022 report, 58% of consumers in the MEA region prefer digital and cashless payment methods, with only 10% of consumers choosing cash. The fintech industry in these regions is driven by a low financial inclusion rate and a high internet penetration.


List of Key Companies in Neobanking Market


Collaborations & Partnerships among Vendors to Propel Market Growth


Key players in this market are collaborating and integrating with similar companies to bring significant financial gains to both parties. Partnerships aid businesses in increasing sales and cutting down costs by sharing or combining resources. For instance,



  • October 2023: Neobank PoetrYY partnered with Mbanq to provide digital finance solutions to startups, underserved communities, individuals, and small businesses.


List of Key Companies Profiled:



KEY INDUSTRY DEVELOPMENTS:



  • January 2024: Nu Mexico partnered with Felix Pago to launch the option to receive money from the U.S.  The partnership simplified the process of sending money from the U.S. to Mexico and transformed the process of cross-border money transfers.

  • November 2023: N26 extended its product portfolio by launching an Instant Savings account. The neobank declared that customers in Germany will seek advantage from up to 2.6% interest p.a. with clear conditions and without additional costs or deposit limits involved.

  • September 2023: Monzo added an investment feature to its offerings. The feature lets clients put their money in funds managed by BlackRock, allowing users to invest even a single British pound, according to the Monzo company website.

  • November 2022: Varo made Zelle (peer-to-peer payment network) as part of its mobile app without partnering with a bank. The launch provided account holders with early access to their paychecks, open free checking and savings accounts, and apply for installment loans.

  • August 2022: Revolut expanded its product lines and geographical presence in the neobank market. It launched credit products leveraging its credit license in Australia and banking license in Europe and is also entering the small and medium businesses market as well.


REPORT COVERAGE


An Infographic Representation of Neobanking Market

To get information on various segments, share your queries with us



The neobanking market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/services, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.


Report Scope & Segmentation










































ATTRIBUTE



DETAILS



Study Period



2019-2032



Base Year



2023



Estimated Year



2024



Forecast Period



2024-2032



Historical Period



2019-2022



Growth Rate



CAGR of 48.6% from 2023 to 2030



Unit



Value (USD Billion)



 


 


 


 


 


 


 


 


 


Segmentation



By Account Type



  • Personal

  • Business


By Service



  • Savings/Checking Accounts

  • Payments & Money Transfers

  • Mobile Banking

  • Loans/Insurance/Investments

  • Others (Safe Deposit Boxes, Money Management Tools)


By Region



  • North America (By Account Type, Service, and Country)

    • U.S.

    • Canada

    • Mexico



  • South America (By Account Type, Service, and Country)

    • Brazil

    • Argentina

    • Rest of South America



  • Europe (By Account Type, Service, and Country)

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Russia

    • Benelux

    • Nordics

    • Rest of Europe



  • Middle East & Africa (By Account Type, Service, and Country)

    • Turkey

    • Israel   

    • GCC   

    • North Africa   

    • South Africa   

    • Rest of the Middle East & Africa



  • Asia Pacific (By Account Type, Service, and Country)

    • China   

    • Japan   

    • India   

    • South Korea   

    • ASEAN   

    • Oceania   

    • Rest of Asia Pacific








Frequently Asked Questions

According to Fortune Business Insights, the market is projected to reach USD 3,406.47 billion by 2032.

In 2023, the market was valued at USD 98.40 billion.

The market is projected to grow at a CAGR of 48.6% during the forecast period.

Savings/Checking accounts are the leading neobanking services in the market.

The rapid adoption of neobanking platforms among MSMEs, micro and small businesses is a key factor driving market growth.

Nu Pagamentos S.A, SoFi, Chime Capital, LLC, Revolut Ltd, N26 AG, Monzo Bank Limited, Varo Bank, Starling Bank, Atom bank plc, and Upgrade are the top players in the market.

Europe holds the highest market share.

By account type, personal account segment is expected to grow with the highest CAGR during the forecast period.

Seeking Comprehensive Intelligence on Different Markets?
Get in Touch with Our Experts

Speak to an Expert
  • 2019-2032
  • 2023
  • 2019-2022
  • 150

Personalize this Research

  • Granular Research on Specified Regions or Segments
  • Companies Profiled based on User Requirement
  • Broader Insights Pertaining to a Specific Segment or Region
  • Breaking Down Competitive Landscape as per Your Requirement
  • Other Specific Requirement on Customization
Request Customization Banner

Client Testimonials

“We are quite happy with the methodology you outlined. We really appreciate the time your team has spent on this project, and the efforts of your team to answer our questions.”

- One of the largest & renowned medical research centers based in the U.S. on a report on the U.S. NIPT Market.

“Thanks a million. The report looks great!”

- Feedback from a consultant on a report on the U.S. Beef Market.

“Thanks for the excellent report and the insights regarding the lactose market.”

- Brazil based company specializing in production of protein ingredients.

“I liked the report; would it be possible to send me the PPT version as I want to use a few slides in an internal presentation that I am preparing.”

- Global Digital Services Agency on a report on the Global Luxury Goods Market.

“This report is really well done and we really appreciate it! Again, I may have questions as we dig in deeper. Thanks again for some really good work.”

- U.S.-based biotechnology company focussing on treatment of chronic pain.

“Kudos to your team. Thank you very much for your support and agility to answer our questions.”

- Europe-based provider of solutions to automate data centre operations.

“We appreciate you and your team taking out time to share the report and data file with us, and we are grateful for the flexibility provided to modify the document as per request. This does help us in our business decision making. We would be pleased to work with you again, and hope to continue our business relationship long into the future.”

- India-based manufacturer of industrial and specialty intermediates with a strong global presence.

“I want to first congratulate you on the great work done on the Medical Platforms project. Thank you so much for all your efforts.”

- One of the largest cosmetics company in the world.

“Thank you very much. I really appreciate the work your team has done. I feel very comfortable recommending your services to some of the other startups that I’m working with, and will likely establish a good long partnership with you.”

- U.S. based startup operating in the cultivated meat market.

“We received the below report on the U.S. market from you. We were very satisfied with the report.”

- Global hearing aids manufacturer.

“I just finished my first pass-through of the report. Great work! Thank you!”

- U.S. based solar racking solutions provider.

“Thanks again for the great work on our last partnership. We are ramping up a new project to understand the imaging and imaging service and distribution market in the U.S.”

- World’s leading advisory firm.

“We feel positive about the results. Based on the presented results, we will do strategic review of this new information and might commission a detailed study on some of the modules included in the report after end of the year. Overall we are very satisfied and please pass on the praise to the team. Thank you for the co-operation!”

- Germany based machine construction company.

“Thank you very much for the very good report. I have another requirement on cutting tools, paper crafts and decorative items.”

- Japanese manufacturing company of stationery products.

“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”

- One of the Leading Food Companies in Germany

“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”

- Intuitive Surgical

“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”

- Major Food Company in Japan

“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”

- Ziering Medical

“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”

- Major Manufacturer of Precision Machine Parts in India

“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”

- Hewlett-Packard

“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”

- Global Management Consulting Firm

“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”

- UK-based Start-up in the Medical Devices Sector

“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”

- One of the Largest Companies in the Defence Industry
We use cookies to enhance your experience. By continuing to visit this site you agree to our use of cookies . Privacy.
X