The global neobanking market is anticipated to witness significant growth over the forecast period owing to the growing customer demand for convenience in the banking sector. Benefits such as easy procedure of account opening & transactions and automated products offered by the neobanking platforms have substantially differentiated neobanks from the traditional banks.
Neobanking websites have a friendly user interface, are designed to resist cyberattacks, and better manage online ecosystems. The neobanks monitor the banking network and easily detect cyberattacks, unlike the traditional banks where an attack is determined by the damages and aftermath of the attack.
Neobanking is an ideal banking technology as it offers complete solutions to customers for online banking. Neobanks are extensively competing with traditional banks in terms of delivering better customer experiences. However, financial security factors and authenticity are some of the factors that are expected to restrain the growth of this market.
The neobanking market is expected to witness growth owing to the exponential use of technology by the customer and growing access to online content in the banking sector. The neobanks offer various features such as cost-effectiveness, higher interest rates, and customer convenience for opening account in a faster and simple way.
The neobanking market is segmented on the basis of account type, application, and region. On the basis of account type, the market is segmented into the business account and savings account. The business account segment held the largest market share in 2018 as it provides a wide range of business-related services such as credit management, asset management, transaction management, and investment management.
On the basis of application, the market can be further segmented into personal, enterprise, and other applications. Enterprises are increasingly adopting neobanking platforms as these platforms facilitate better management of enterprise’s collections, payments, and reconciliation on a seamless interface.
Based on the region, the market can be segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Among these regions, Europe held the largest market share in the year 2018, owing to the establishment of multiple technology start-ups and early adoption of technology. The congestion faced in major commercial banks and a rapid increase in technological banking start-ups has created growth opportunities for the non-conventional banking institutions in the region.
The Asia Pacific region is expected to emerge as the fastest-growing regional market over the forecast period owing to the increasing investments in the FinTech sector. FinTech companies are now developing neobanks as these banks do not demand cumbersome organizational structures and legacy structures. This will result in an increase in the number of neobanks in countries such as India and China.
The key players in the neobanking market are MYBANK; Fidor Bank; CBC; Toscana; Agricultural Bank of China; Deutsche Bank; Citigroup, Inc.; HSBC Group; Starling bank; Movencorp Inc.; and Webank, Inc.; among others. The companies are focusing on entering into partnerships and launching their platforms to gain a competitive edge and increase their market shares. For instance, In April 2018, Fidor, a provider of advanced online banking solutions, collaborated with International Finance Corporation (IFC) to expand its operations in the Latin America and Middle East & Africa regions.
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