Neobanking Market Size

Neobanking Marketto surpass USD 3600.5 Billion by 2031 from USD 63.6 Billion in 2021 at a CAGR of 48.90% in the coming years, i.e., 2021-31.

Neobanks is a new kid in the financial world. They are a type of direct bank that is completely online with no physical branches and provide complete banking solutions to its customers. Neobanking offers everything a traditional bank has to offer from opening a bank account to money lending, money transfers, and much more. There are two kinds of Neobanks, first which have no banking license and partner up with a traditional bank such as Up bank in Australia which is partnered with Bendigo Bank, and second are neobanks with a full banking license of their own such as Xinja and Volt. Some of the first-ever Neobanking organizations include Simple, GoBank, and Moven.

Market Highlights

Neobanking Market is expected to project a CAGR of 48.90% during the forecast period, 2021-2031

The neo banking market is globally driven by features like simplicity, speed, cost-effectiveness, and improved functionality offered to the customers. The wide varieties of products accessible are unlimited, which is most likely to increase market development over the forecasted period. The rising smartphone penetration in both developed and developing countries is also a factor supporting the neo banking market as it is boosting the demand for online and app-based banking. Characteristics of the neo banking market such as its convenience, cost-effectiveness, online money tracking option, unique experience for customers, and easy payouts make it popular as well as one of the fast-growing fintech markets globally.

Global Neobanking Market: Segments

According to account type

the neo banking market includes neo and challenger banks. Challenger banks are banks that are small retail banks to compete for business against the bigger nationalized banks. It is divided into the business account and savings account. The business account had the largest market share in 2018 due to its wide range of management services such as credit management, and asset management. It dominated the global market in 2018 in terms of revenue share. This segment is also expected to register a high CAGR in 2026. The growth factors for the neo banking industry are cost-effective and convenient. Though the authenticity and financial security factors may bring disturbances in its path.

The application segment includes the personal and the enterprise sector

Enterprises are adopting this neo banking market as they facilitate better management of payments and all other online services while the personal application segment is anticipated to register the highest CAGR in the future.

Market Dynamics

Drivers

Easy account opening process and easy transactions will drive the market growth

Easy processes of account opening, transactions, etc. are strong driving factors for the market. The user interface of the Neobank websites gives it an advantage over the traditional banks. Premium drivers of neo banking are cost-effective banking, fast maintenance, advanced banking, healthy interest rates,and customer conviction. In addition, increased internet and mobile device penetration improved global neo banks' market potential. The market will help to maintain healthy growth rates over the next few years by increasing investment in Neo-baking.

Restraints

A limited range of banking products is likely to hamper the market growth

The range of banking products on offer from neobanks is limited to everyday transactions and savings accounts which are expected to act as a restraint in the neo banking market.

Global Neobanking market: Regions

Europe held a maximum share of around 40% of the Global neo banking market due to the emergence of multiple technology startups and early adoption of technology. Latin America is likely to dominate the European market shortly. The APAC neo banking market is projected to grow over the forecast period due to the increasing investments in the fintech sector. Asia is seen, in addition to Europe and Latin America, as one of the world’s major regions that show an upcoming growth in this sector. For example, China is expected to become one of the biggest neo banking markets by 2025. E-commerce companies such as Alibaba Group and WeBank, have invested in China’s MyBank neo banking platform. The fintech companies are developing their neo banking platforms which have fewer regulatory requirements as they do not offer a full set of services. This has uplifted the growth of neobanks in developing countries such as India and China.

Global Neobanking market: Key Players

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Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis