Neobank are digital-only banks without any physical branches and operates on a partnered bank license in the market. These banks provide digital and mobile-first financial payment solutions, remittances & money transfers services, lending, checking & saving account, insurance, and mortgages completely via mobile applications. In addition, neobanks also provide value-added services such as automated accounting, expenses management, and payroll, especially to growing small & medium enterprises.
Challenger banks are established firms and operate with a full banking license in the market. These banks provide services such as lending, investments & savings accounts, checking & merchant accounts, mobile banking, credit cards, mobile banking, and others (retirement savings, insurance products, and buying & selling of cryptocurrency). These banks are continuously challenging over existing traditional banks, by innovating & integrating several technologies in their product offerings.
Together, neo and challenger banks have entered in the banking industry with advance features, real-time services and client-centric products & services posing challengesforthe existing traditional banks in the market.
Higher interest rates offered to customers over traditional banks, government & regulatory supports toward banking operations, and better convenience provided via mobile applications are major driving factors of the market. However, acquiring customers online and profitability for these start-up banks limit the market growth. Moreover, the neo and challenger bank market is expected to have lucrative opportunities such as to expand their business by strengthening online offerings to unbanked population in the emerging economies. In addition, business expansion, development of existing banking portfolio, bundling the product offerings and provide customized solutions are remaining some other focus areas for these Fintech banks in the upcoming years.
By Service Type
Loans are projected as one of the most lucrative segments.
The neo and challenger bank market is segmented on the basis of service type, end user, and region. In terms of service type, it is classified into loans, mobile banking, checking & savings account, payment & money transfer, and others. By end user, it is bifurcated into business and personal. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
By End User
Business is projected as one of the most lucrative segments.
The key players profiled in the global neo and challenger bank market analysis are Atom Bank plc, Fidor Solutions AG, Monzo Bank Limited, Movencorp, Inc., MYbank, Number26 GmbH, Simple Finance Technology Corporation, Tandem Bank, UBank limited, and WeBank. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Key benefits for stakeholders
The study provides an in-depth analysis of the global neo and challenger bank market along with the current & future trends to elucidate the imminent investment pockets.
Information about key drivers, restrains, and opportunities and their impact analysis on the market size is provided in the report.
Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the industry.
The quantitative analysis of the global neo and challenger bank market from 2020 to 2027 is provided to determine the market potential.
Neo and Challenger Bank Market Report Highlights
| Aspects | Details |
 By Service Type |
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 By End User |
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 By Region |
|
 Key Market Players | UBank Limited, MYbank, WeBank, Simple Finance Technology Corporation, Number26 GmbH, Movencorp Inc., Tandem Bank, Fidor Solutions AG, Monzo Bank Limited, Atom Bank plc |
Analyst Review
The neo and challenger bank market is at its nascent stage, however, it haswitnessed a steady growth since its inception in the banking industry. Neo and challenger banks started a concept to disrupt the financial services industry and restore confidence of customerspost financial crisis, thus providing required financial capital to the underbanked consumers and underserved small & medium-sized enterprises(SMEs) globally. Banking regulators and other financial authorities have a favorable stance on approvals for neo and challengerbanks in the market. The market has observed an influx of digital neo and challenger banks, addressing consumer needs & demand for virtual banking offerings. The proliferation of FinTech startups are higher in Europe compared to the U.S., owingto hassle-free regulations and policies. These digital challengers offer services such ascurrent account, savings account, and mortgages via web or mobile interface, thus reducing their costs (labor and administration), which are then passed on to end consumers. With increase in number of neo and challenger banks in the market, lenders have become ambitious to meet the demand of end users. To achieve these targets, lenders need tocompete on rate or loosen criteria, making it easier for businesses to borrow funds in the market. However,many traditional banks are still not prepared for the same, thus the neo and challenger banks market is expected to grow during the forecast period.
The neo and challenger bankmarket is consolidated with the presence of key vendors such as Atom Bank plc, Monzo Bank Limited, and Number26 GmbH. Europe dominated the neo and challenger bank market in 2019,and is expected to maintain this trend during the forecast period. However, Asia-Pacific is expected to exhibit fastest growth in the near future,owing to emerging economies such as Australia, Hong Kong, China, India, Singapore, and South Korea.Some of the key players profiled in the report include Fidor Solutions AG, Movencorp, Inc., MYbank, Simple Finance Technology Corporation, Tandem Bank, UBank limited, and WeBank. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
The market share is 50.6% from 2016 to 2020.
Convenience offerings of banking services to businesses and better interest rates over traditonal banks, approvals and granting of banking licenses by financial authorities are driving the neo and challenger bank market growth.
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The potential customers of neo and challenger bank market are individuals, corporates, businesses, and others.
Atom Bank Plc, Movencorp Inc., Simple Finance Technology Corporation , Fidor Bank AG, and Number26 GmbHare the leading players in neo and challenger bank market.
On the basis of top growing big corporations, we select top 10 players.
Europe and Asia-Pacific will provide more business opportunities for neo and challenger bank market in future.
The key growth strategies of neo and challenger bank market players are partnership, product launch, and aquisition.
The neo and challenger bank market is expected to reach $50.2 million by 2020
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