San Francisco, 08 March 2024: The Report Neobanking Market Size, Share & Trends Analysis Report By Account Type (Business, Savings), By Application (Enterprises, Personal), By Region (Asia Pacific, Europe), And Segment Forecasts, 2023 - 2030

The global neobanking market size is expected to reach USD 2,048.53 billion by 2030, growing at a CAGR of 54.8% from 2023 to 2030, according to a new report by Grand View Research, Inc. Factors, such as a faster process of loan approval and funding, compared to traditional banks, with low-interest rates via banking applications are driving the growth of the market. Increasing technological advancements, such as Artificial Intelligence (AI) and IoT, in online banking platforms, are also expected to boost the market growth over the forecast period. The rising popularity of mobile-based applications for making international fund transfers and online payments is also propelling the market growth. Governments in various countries are making efforts to promote internet services across rural areas.

Furthermore, leading players are offering customized services via mobile applications to help customers and enterprises manage their finances, savings, and spendings efficiently. Such factors bode well for the growth of the market. Factors, such as the accelerated expansion of the customer base, innovative revenue generation & modernization models, and increasing product launches globally, are expected to significantly contribute to the market growth over the forecast period. Numerous financial service providers are launching services through mobile apps to make payments faster. For instance, in November 2020, Revolut announced the launch of Google Pay for its customers in Greece, Bulgaria, Estonia, Austria, Hungary, Lithuania, Latvia, Portugal, the Netherlands, and Romania to make online and in-store payments fast and simple.

The outbreak of the COVID-19 pandemic positively impacted the global market on account of the rising dependency on online banking platforms for making payments. Numerous citizens and enterprises around the world preferred simple, safe, and helpful ways to adopt contactless payment technologies. The market players are also responding to the changing requirements of the enterprises and are diversifying their solutions and services to manage the taxing, budgeting, and accounting for small and medium-sized enterprises at lower costs.

The rising demand for convenience among customers in the banking sector is expected to drive market growth. Neobanks offer banking solutions without the need for physical branches or offices. They help users validate their service offerings in real-time through online channels and mobile sites. In addition, the growing adoption of smartphones and the internet across the world for online banking is expected to further accelerate the demand for neobank platforms.

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The increasing number of partnerships of banks and organizations to launch neobanks platforms is also accelerating the market growth. Such partnerships are aimed toward providing a better customer experience and enhanced safety and stability. For instance, in April 2021, Google pay co-creators announced the launch of Fi, a neobank, in partnership with the Federal Bank to provide an instant savings account with debit cards for salaried millennials. Technological advancements and the notable increase in internet penetration globally allow financial service providers to offer novel digital services to customers. Moreover, the growth in digital wallets has also been driving the demand for online banking platforms.

Neobanking Market Report Highlights

• The business account segment dominated the market in 2022. The ability of neobanks to offer a faster and transparent model and their low-cost structure are the key factors influencing the market growth. The growing adoption of mobile and digital banking as a mode of payment by small & medium-sized enterprises and large enterprises is expected to propel the growth of the business account segment over the forecast period.
• The personal segment is anticipated to emerge as the fastest growing segment. Factors such as reduced reloading fees, zero withdrawal expenses, no monthly fees, and low cost of transactions are expected to contribute to the growth of the personal application segment. Rising awareness among customers is expected to bode well for the market growth.
• Europe dominated the market in 2022 and is expected to retain its position over the forecast period. The growth can be owed to entry of a large number of new vendors in the regional market. The advent of open banking adoption in the region is an additional factor expected to benefit neobanking operations.

According to Visa, a multinational financial service company, there are more than one billion mobile money wallets worldwide. Many financial service providers are collaborating with mobile money wallet providers to offer affordable money transfer services. Neobanking is gaining popularity among retail customers and Small- and Medium-sized Enterprises (SMEs). Free debit cards, digitized account opening, personal finance advisory, instant payments, e-bill generation, invoice management, account integration, and GST-compliant invoicing are some of the key features propelling retail customers and SMEs to adopt neobanks over traditional banks and use the digital services offered by them efficiently.

COVID-19 Impact Analysis

The outbreak of the COVID-19 pandemic is expected to create new growth opportunities for the market owing to the rising dependency on online banking services. A myriad of social, political, and economic challenges has become apparent across the globe in the wake of the pandemic. These challenges are affecting both financial service providers and investors. On the contrary, numerous SMEs relied on neobanks to fulfill their working capital needs during the pandemic, thereby driving the growth of the market.

Neobanking Market Report Scope

List of Key Players of Neobanking Market

• Atom Bank PLC
• Fidor Bank Ag
• Monzo Bank Ltd.
• Movencorp Inc.
• Mybank
• N26
• Revolut Ltd.
• Simple Finance Technology Corp.
• Ubank Limited
• Webank, Inc.