Neobank

A neobank (also known as an online bank, internet-only bank, virtual bank or digital bank) is a type of direct bank that operates exclusively online without traditional physical branch networks.[1][2][3] The term "challenger bank" is used in the UK to refer to a number of fintech banking startups that emerged in the wake of the 2007–2009 financial crisis. Their services may be accessed by clients through their respective computers or mobile devices.

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    The range of services provided by neobanks is not as broad as that of their traditional counterparts. Unlike incumbent banks, a large portion of the income of neobanks is mainly made up of transaction fees received when customers pay with their debit card.[4]

    Neobanks are fintech companies that offer both standard banking services entirely online and non-traditional ones (peer-to-peer payments, financial advisory robots, cryptocurrency transactions, and crowdfunding platforms to raise funds for certain financial projects or their intangible equivalents that are directly related to the project). [5]

    History

    The term neobank has been in use since at least 2016[1] to describe fintech-based financial providers that were challenging traditional banks. There were two main types of company that provided services digitally: companies that applied for their own banking license and companies in a relationship with a traditional bank to provide those financial services. The former were called challenger banks and the latter were called neobanks.

    Notable neobanks

    According to Dealroom.co[6] the most notable neobanks in Europe are the below:

    1. Monzo
    2. Chime
    3. N26
    4. Revolut
    5. Starling Bank
    6. OakNorth Bank
    7. Zopa
    8. Atom Bank
    9. Qonto
    10. Wise
    11. Adyen
    12. Bunq
    13. Viva Wallet
    14. Monese
    15. Tandem
    16. Nubank

    See also

    References
    1. "Digital Economy Outlook" (PDF). BBVA Research. 2016. p. 12.{{cite web}}: CS1 maint: url-status (link)
    2. Ballard, Barclay (October 11, 2018). "The unstoppable rise of neobanks". World Finance. Retrieved 31 December 2018.
    3. "What is a neobank?". Business Standard India. 6 May 2022. Retrieved 14 May 2022.
    4. Walden, Stephanie (2021-06-24). "What Is A Neobank?". Forbes Advisor. Retrieved 2021-11-21.
    5. Koibichuk, Vitaliia; Ostrovska, Natalia; Kwilinski, Aleksy; Kashiyeva, Flora (2021-03-30). "Innovation technology and cyber frauds risks of neobanks: gravity model analysis" (PDF). pp. 253–265. doi:10.21272/mmi.2021.1-19.
    6. "Dealroom.co - European Challenger List".
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