Neobanks in Europe

Neobanks are digital-only banks that offer financial services primarily through mobile and web applications, with little or no reliance on physical branches. These banks have gained prominence in the European financial landscape in 2010s, driven by advancements in technology, changing consumer preferences, and supportive regulatory frameworks. Neobanks provide a range of services, including personal accounts, loans, and payment services, with a focus on user-friendly interfaces, low fees, and innovative features.[1][2] In 2022, European neobank market have generated over 570B transactions.[3]

Growth of Neobanks in Europe

The neobank industry in Europe has experienced rapid growth in recent years, with several new players entering the market and attracting millions of customers. Key factors:

  1. Technology advancements: The widespread adoption of smartphones and high-speed internet has made it easier for consumers to access banking services through digital channels, paving the way for the rise of neobanks.
  2. Changing consumer preferences: As consumers increasingly demand personalized, user-friendly experiences, neobanks have capitalized on this trend by offering innovative financial products and services tailored to the digital age.
  3. Supportive regulatory environment: The European Union's Revised Payment Services Directive (PSD2) has facilitated the entry of non-traditional financial players, such as neobanks, into the market by enabling third-party providers to access customer account data from traditional banks with customer consent. This has allowed neobanks to develop innovative solutions and compete with established banks.[1][4][5]

Some European neobanks
  1. Revolut (United Kingdom) launched in 2015 is Europe's largest neobank, offering services such as personal accounts with local IBANs, debit cards, currency exchange, and investment products.[6][7] Revolut is expanding to India and the USA.[8]
  2. N26 is a German neobank that has expanded its operations across Europe with a focus on Europe.[9]
  3. Monese is a London-based fintech which secured 35M from HSBC in 2022.[10][11]
  4. bunq (Netherlands) is founded in 2012 and operating in 30 European countries, offering services such as personal accounts, debit cards, currency exchange, and savings, and is expanding in the USA.[12] Bunq is Europe's second largest neobank.[13]
  5. Wise (company) (United Kingdom) is a foreign exchange financial technology company.
  6. Vivid Money is a Germany based neobank funded bij Russian Tinkoff Bank, with support from Berlin-based solarisBank and Visa.[14][15]

References
  1. "Europe's neobanks are outpacing legacy banks in app adoption". fintechmagazine.com. 2023-02-21. Retrieved 2023-04-12.
  2. "Neobanks across Europe fatten up as VCs demand profits". Tech.eu. 2023-03-22. Retrieved 2023-04-12.
  3. "Europe Neobanking Market Size & Share Analysis - Industry Research Report - Growth Trends". www.mordorintelligence.com. Retrieved 2023-04-12.
  4. "Open banking in Europe: The impact of the Revised Payments Services Directive on Solarisbank and Insha" (PDF).
  5. Padmanabhan, Arun (2021-10-07). "Explained: Neobanks, the next evolution of banking". The Economic Times. ISSN 0013-0389. Retrieved 2023-04-12.
  6. Makortoff, Kalyeena; correspondent, Kalyeena Makortoff Banking (2023-01-16). "Fintech firm Revolut assembles behavioural team after criticism of its corporate culture". The Guardian. ISSN 0261-3077. Retrieved 2023-04-12.
  7. "Revolut becomes most valuable UK start-up after £24bn valuation". BBC News. 2021-07-15. Retrieved 2023-04-12.
  8. "Revolut India - Breaking financial borders". Revolut. Retrieved 2023-04-20.
  9. "An update from N26 US". An update from N26 US. 18 April 2023.{{cite web}}: CS1 maint: url-status (link)
  10. Sawers, Paul (2022-09-20). "European neobank Monese nabs $35M from HSBC". TechCrunch. Retrieved 2023-04-12.
  11. O'Hear, Steve (2015-09-21). "Monese Launches In U.K. To Let Immigrants And Expats Get A Mobile Banking Account". TechCrunch. Retrieved 2023-04-12.
  12. "We're coming to the US | bunq". www.bunq.com. Retrieved 2023-04-17.
  13. Pugh, Alex (May 6, 2022). "Dutch challenger Bunq becomes EU's second largest neobank with Tricount acquisition". Fintech Futures.{{cite web}}: CS1 maint: url-status (link)
  14. Lunden, Ingrid (2022-02-07). "Vivid Money, a financial super app, raises $114M at an $886M valuation to expand in Europe". TechCrunch. Retrieved 2023-04-26.
  15. "Vivid Money taps solarisBank and Visa for launch in Germany". Finextra Research. 2020-06-08. Retrieved 2023-04-28.
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