Are you tired of the hassle and inconvenience of traditional banking? Neobanks, also known as digital banks, online banks and challenger banks, are revolutionizing the banking industry by offering a range of financial services that are accessible through your mobile device or computer. With the number of neobank users projected to reach 394 million by 2024, it’s clear that digital banking is on the rise.
In this article, we’ll take a comprehensive look at the leading neobanks in the market, their unique features, and the potential benefits for customers. Join us as we explore the growing landscape of neobanks and their impact on the future of banking.
The growing landscape of neobanks
In recent years, the neobank sector has experienced significant growth, with a growing number of players entering the market and existing neobanks expanding their offerings and customer base.
They provide banking services as traditional banks, but with the added convenience of being accessible from a mobile device or computer.
- According to a report by Mordor Intelligence, the global neobanks market was valued at USD 18.6 billion in 2020 and is expected to reach USD 333.4 billion by 2026, growing at a CAGR of 50.6% during the forecast period.
- Transaction value is expected to show an annual growth rate (CAGR 2023-2027) of 18.25% resulting in a projected total amount of US$8.86tn by 2027, according to Statista.
- The number of neobank users worldwide is projected to reach 394 million in 2023, up from 39 million in 2018, due to the Statista report.
These statistics highlight the rapid growth and increasing popularity of neobanks as a disruptive force in the traditional banking industry:
- The market for neobanking has experienced a substantial increase in size, with a 36% year-over-year growth from 2020 to 2021, indicating a growing demand for digital banking solutions.
- This trend is expected to continue, with a higher compound annual growth rate projected over the next eight years.
- The figures project the market to exceed $66 million USD in 2022 and grow to over $2 billion by 2030, reflecting a customer preference for convenient, secure, simple, and accessible banking solutions.
Source: Grand View Research
One of the main reasons for the growth of neobank transactions and spending is the increasing adoption of digital payment methods. With more people using mobile payment apps, it has become easier and more convenient to conduct financial transactions without the need for cash or physical cards.
Therefore, in 2026, more than 7.5 trillion USD will be spent using neobanks.
Top neobanks market trends
Neobanks offer a range of services such as checking, savings and investment accounts, personal loans and deposits, and credit cards, but with the added convenience of being accessible through a mobile app or website without physical branches. Here are some of the latest market trends in the neobanking industry:
Increased competition
As neobanking gains popularity, the market has become increasingly competitive, with traditional banks and fintech companies launching their own digital banking platforms to compete with neobanks.
Expansion into new markets
Many neobanks are expanding their services into new markets, both domestically and internationally. For example, UK-based neobank Revolut has expanded its services to the US, Australia, and other countries.
Partnerships and acquisitions
Neobanks are partnering with traditional banks and fintech companies to expand their offerings and reach new customers. For example, Germany-based neobank N26 has partnered with TransferWise and launched its own investment platform.
Focus on personalization
Neobanks are focused on providing personalized services to their customers, leveraging data and analytics to offer customized products and experiences.
Integration of new technologies
Neobanks are integrating new technologies such as artificial intelligence (AI) and blockchain to improve their services and streamline their operations.
Sustainable finance
Neobanks are increasingly focused on sustainable finance and offering environmentally friendly banking products, such as debit cards made from recycled materials and carbon offsetting programs.
These trends are likely to continue shaping the neobanking industry in the coming years as digital banking becomes more popular and traditional banking continues to evolve.
Best neobanks in the digital payment market
Among the numerous digital-only banks on the market, here are the top neobanks that are well-known around the world.
Revolut
Revolut is a financial technology company that was founded in the United Kingdom in 2015. It operates in 38 countries around the world, including the United Kingdom, European Union countries, Switzerland, Australia, Canada, Japan, Singapore, and the United States.
The company offers a range of financial services, including current bank accounts, debit cards, foreign exchange, cryptocurrency exchange, savings accounts, investment accounts, and insurance. Revolut is known for its lower fees and competitive exchange rates unlike traditional banks, as well as its user-friendly mobile app.
Image source: Reevolut official website
One of the key features of their software is its ability to provide users with real-time notifications and instant spending updates. Revolut also offers a range of security features, such as the ability to freeze and unfreeze your card instantly, set up location-based security settings, and enable two-factor authentication.
In addition to its traditional banking services, the company has also recently launched a range of premium subscription plans with monthly subscription fee, which offer additional features such as travel insurance, cashback rewards, and access to airport lounges.
Chime
Chime is an American financial technology company that offers mobile banking services.
This online bank was founded in 2013 and is headquartered in San Francisco, California, USA. Additionally, the neobank has introduced a product named “SpotMe” that enables customers to overdraw on debit card transactions up to $200, without incurring any overdraft fees.
Image source: Chime official website
Chime offers early access to direct deposits, which means that customers can receive their paychecks up to two days early. This can be very helpful for customers who need access to their money sooner.
N26
It is a German-based neobank that was founded in 2013. It provides banking services in many countries such as Austria, Estonia, France, Germany, Latvia, Netherlands, Poland, Spain, Switzerland, the United Kingdom and others.
N26 is known for its user-friendly mobile online banking app and its focus on convenience money management and innovation. It offers features such as no-fee checking accounts, budgeting tools, and mobile payments. It also has a mobile app with a modern and intuitive design.
Image source: N26 official website
N26 is a unique neobank due to several factors: mobile-first approach and global availability. The company is available in several countries across Europe and the US, making it a good choice for people who frequently travel or move between countries.
Monzo
Monzo is another popular neobank in Europe.The company was founded in 2015 and is headquartered in London, England.
It offers no-fee checking accounts, savings accounts, and mobile payments. It also has a great mobile app that makes it easy to access your account.
One of the key features of Monzo is its real-time spending notifications, which provide customers with instant updates on their spending and account balance.
Image source: Monzo official website
The mobile app also offers a range of budgeting tools, including spending categorization, bill reminders, and savings goals, to help customers manage their money more effectively.
Starling Bank
Starling Bank is a UK-based neobank that was founded in 2014. The company is known for its focus on customer experience, with a user-friendly mobile app and a range of innovative features.
One of the key features of Starling Bank is its real-time notifications, which provide customers with instant updates on their spending and account balance. The mobile app also offers a range of budgeting tools, including spending categorization and spending insights, to help customers manage their finances more effectively.
Image source: Starling official website
Starling Bank also offers a range of security features, such as the ability to freeze and unfreeze your card instantly, set up location-based security settings, and enable two-factor authentication.
The bank also uses biometric authentication, such as fingerprint and face recognition, to ensure that only authorized users can access the mobile app.
Varo
Varo is an American neobank that operates only within the United States and was founded in 2015. The company offers a range of financial services, including checking and savings accounts, loans, and credit cards. Varo is known for its user-friendly mobile app, low fees, and competitive interest rates.
One of the key features of Varo is its fee-free banking. The company does not charge monthly maintenance fees, ATM fees, or overdraft fees. In addition, Varo offers a high-yield savings account with a competitive interest rate, allowing customers to earn more on their savings.
Image source: Varo official website
Varo has also recently launched a range of lending products, including personal loans and credit builder loans. These products are designed to help customers build their credit and achieve their financial goals.
Aspiration
Aspiration is a US-based neobank, that was founded in 2013. Aspiration is known for its focus on sustainability and social responsibility, with a mission to help customers align their financial choices with their values. One of the key features of Aspiration is its commitment to giving back to the community.
Aspiration also offers a feature called “Conscience Coalition,” which allows customers to track the social and environmental impact of the companies they are investing in. In addition to its sustainability focus, Aspiration also offers competitive interest rates on its checking and savings accounts, as well as cashback rewards for purchases made with its debit card.
Image source: Aspiration official website
Note that this is not an exhaustive list of best neobank and there are many other solutions operating in different countries with their unique features and services.
SDK.finance neobank software solution
SDK.finance offers a software platform for building a digital retail bank. It is a robust foundation that you can use to add a number of must-haves to your future-ready neobanking solution.
Whether it’s new features or better security measures, our API set makes it easy to connect the right tools to your product as required by regulations or for the customers’ convenience.
SDK.finance platform offers a wide range of features needed for all your clients’ banking needs thanks to its customer-centric approach. With our neobank software you can provide the following services:
- P2P money transfers
- Popular payments
- Multi-currency accounts
- Currency exchange
View the demo video of the SDK.finance Platform to see how you can streamline transaction management and guarantee financial compliance using our robust FinTech Platform and core banking services:
The neobanking solution from SDK.finance for digital retail banking is available in two variants – cloud-based software or on-premise with the source code license.
You can start with our scalable hybrid cloud banking solution to launch your banking business faster and cheaper.
Conclusion
Neobanks are quickly becoming the go-to choice for many customers looking for a modern banking experience.
They offer several advantages over traditional banks, such as low fees and high interest rates, an easy sign-up process, 24/7 customer support, and comprehensive digital banking experiences.
Build your own neobank using the SDK.finance fintech software to speed up time to market. Our payment software serves as a reliable foundation for building a neobank or a digital retail bank, so you are free to shape your product according to your product vision, yet saving at least 1 year of active development and lots of team resources instead of having to start from scratch.
