The neobanking market is anticipated to expand at a CAGR of 59.4% from 2025 to 2031.
Neobanks operate entirely online, with no physical infrastructure, and rely on fintech to offer banking services.
Neobanking Market Analysis
The neobanking industry consists of technology-based enterprises that exclusively provide digital banking services. This can encompass everything from bill payments to mobile check deposits. These financial organizations operate entirely online, with no physical branches, and offer all banking services and more digitally. Neobanks use technology such as artificial intelligence (AI), automation, and cloud computing to provide highly personalized services at cheaper costs. A neo-bank provides a digital banking solution that is often mobile-first and branchless, with the goal of disrupting a certain segment of the financial services industry using customer-centric and technology-driven approaches. The “neobanking market analysis” has been performed by considering the following segments: account type, and application.
Neobanking Industry Overview
- Neobanks are digital financial institutions that provide a wide range of banking and financial services. Neobanks operate entirely online, with no physical infrastructure. Neobanks rely on fintech to offer banking services.
- Neobanks often offer all of the primary services that traditional banks do, including savings and checking accounts, payment, credit cards, fund transfer services, vehicle and personal loans, mortgages and investments, and insurance products.
- The global neobanking market is growing because of the increasing digitalization of banking processes and demand for digital banking solutions. Convenience Offered to Customers, and Best Interest Rates Offered Over Traditional Banks are among the factors contributing to the growing neobanking market size. However, low profitability impedes the neobanking market growth.
- Furthermore, the increased use of mobile banking has a beneficial impact on market growth. However, the neobanking market's expansion is hampered by security and privacy concerns, as well as hefty implementation costs. On the contrary, increased investments in the fintech industry are likely to provide lucrative prospects for market expansion over the forecast period, and the neobanking market size is expected to reach US$ 3000 billion by 2031.
Neobanking Market Driver
Growing Demand for Digital Banking Solutions to Drive the Neobanking Market
- As digital technologies become more widely adopted, consumers expect efficient and convenient banking services. Neobanking service providers offer solutions that enable banks and financial institutions to provide digital banking services such as mobile banking, online banking, and digital payments, hence driving market growth in this field.
- Furthermore, banks and other financial institutions are prioritizing customer experience improvements in order to stay competitive in the market. Customers benefit from tailored, seamless experiences with neobanking solutions, which drives demand for them.
- several banks and financial institutions use BPOs to better manage their business operations by improving collaboration, simplifying compliance, increasing efficiency, and managing risks. Furthermore, Business process outsourcing (BPOs) are becoming increasingly popular because they provide superior data planning and streamlining on a single platform. This helps to control operating costs, improve decision-making, and boost sales.
- The usage of digital technology in banking is likely to increase in the future years, as banks focus more on enhancing operational and business process efficiency. This is expected to boost the expansion of the neobanking market over the forecast period. And the neobanking market trends include leverage of AI and ML for fraud detection.
Neobanking Market Report Segmentation Analysis
- Based on the account type, the neobanking market is segmented into business and savings. The business segment is expected to hold a substantial neobanking market share in 2023.
- Various businesses throughout the world are choosing neobanking as their preferred method of payment for large payouts. Furthermore, the capacity of neobank platforms to simplify and streamline processes in disbursements to suppliers and other stakeholders by decreasing human participation is projected to support the segment's growth.
- The savings account segment is predicted to have the fastest CAGR during the projection period. Several health tech companies are forming alliances with fintech firms to create and market goods and services to meet the expanding demand for the product.
- For example, in November 2021, Fedo, a health IT startup, announced the creation of a health savings account called Fedo HSA in collaboration with Open, a neobank. Fedo HSA intended to offer combined accounts through this cooperation that would assist consumers in meeting their required spending by combining insurance, smart savings, and a line of credit in savings accounts with health credit and debit card capabilities.
Neobanking Market Geographic Analysis
The scope of the neobanking market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. In terms of revenue, APAC dominated the neobanking market share. Asia Pacific (APAC) is experiencing rapid growth and is anticipated to hold a significant neobanking market share. The region's significant economic development, growing population, and increasing focus on financial inclusion across diverse economies have contributed to this growth. The early acceptance of new technologies and the creation of several novel technologies are responsible for the growth of the regional market. In addition, corporations are concentrating on initiating product platforms and forming alliances to fortify their market standing. In order to create an O2O form of distribution and open up market expansion potential, several neobanks in the region have started to establish brick-and-mortar distribution channels.
Neobanking Market Report Scope
The " Neobanking Market Analysis" was carried out based on the account type, application, and geography. In terms of account type, the market is segmented into business and savings. Based on application, the neobanking market is segmented into enterprises, personal, and others. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America. The neobanking market report includes company positioning and concentration to evaluate the performance of competitors/players in the market.
Neobanking Market News and Recent Developments
Companies adopt inorganic and organic strategies such as mergers and acquisitions in the neobanking market. The neobanking market forecast can help stakeholders plan their growth strategies. A few recent key market developments are listed below:
- In June 2023, Zepz, a London-based fintech company, created a neobanking solution for migrants living in the US. Sendwave, a Zepz-owned remittance service, has introduced Sendwave Pay. Sendwave, based in Boston, runs a digital remittance service in East and West Africa. It was acquired by fintech business Zepz in 2021, which also owns the money transfer brand WorldRemit. Sendwave Pay attempts to make sending money to Africa easier. It is an FDIC-insured bank account that includes a debit card. Account users can save up to 25% on transaction fees for remittances to Kenya, Ghana, and several other African nations. Such a product launch aims to leverage the resources of both companies to drive the growth and accessibility of financial services for individuals and businesses.
[Source: Zepz, Company Website]
- In February 2022, Stashfin, a neobanking platform, published its latest brand video, which features an all-in-one card designed to fulfill the demands of every consumer. The film, created by Havas Worldwide India (Creative), highlights the unique proposition of Stashfin's all-in-one card, which provides fast funds, free ATM withdrawals, cashback offers, and welcome rewards. With a brand promise of 'Nobody in India should be credit-starved,' Stashfin has been aiming to increase the financial inclusion of diverse client sectors that are difficult to accept by traditional banking institutions. The company also assists underrepresented groups in developing their credit footprints, allowing them to enhance their standard of living.
[Source: Stashfin, Company Website]
Neobanking Market Report Coverage & Deliverables
The market report on “Neobanking Market Size and Forecast (2021–2031)”, provides a detailed analysis of the market covering below areas-
- Market size & forecast at global, regional, and country-level for all the key market segments covered under the scope.
- Market dynamics such as drivers, restraints, and key opportunities.
- Key future trends.
- Detailed PEST & SWOT analysis
- Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
- Industry landscape and competition analysis covering market concentration, heat map analysis, key players, and recent developments.
- Detailed company profiles.
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Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
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to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
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to country scope.
Frequently Asked Questions
The convenience offered to customers and the best interest rates offered over traditional banks are the major factors that propel the global neobanking market.
The global neobanking market market is expected to grow at a CAGR of 59.4 % during the forecast period 2023 - 2031.
The key players holding majority shares in the global neobanking market are Monzo Bank Limited, Fidor Bank Ag, Atom Bank PLC, Movencorp Inc., and Mybank.
Leverage of AI and ML for Fraud Detection, which is anticipated to play a significant role in the global neobanking market in the coming years.
- Monzo Bank Limited
- Fidor Bank Ag
- Atom Bank PLC.
- Movencorp Inc.
- Mybank
- N26
- Revolut Ltd.
- Simple Finance Technology Corporation
- Ubank Limited
- Webank, Inc.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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