USD 36.14 billion
Report ID: SQSG45B2025 | Region: Global | Published Date: November, 2022 | Pages: 242 | Tables: 62 | Figures: 75
Neobanking Market size was valued at USD 36.14 billion in 2021 and is poised to grow from USD 62 billion in 2022 to USD 2048.53 billion by 2030, growing at a CAGR of 54.8% in the forecast period (2023-2030).
Rising demand for convenience among customers in the banking sector is expected to drive market growth. Neobanks offer banking solutions without the need for physicals branches or offices. They help users validate their services 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 expected to further accelerate the demand for neobank platform.
Vendors are focusing on launching their mobile app-based banks. The major banks have been slower in terms of the adaptation to new technologies and changing customer needs; however, start-up digital banks have been amassing a large user base actively using their services. Moreover, these start-ups are focusing on developing services that can be easily integrated with business processes. Neobanks are challenging the universal banking model with their personalized insights, lower costs, user-friendly interfaces, predictive intelligence, easy accessibility, and simplified process.
These banks are prioritizing customer needs and structuring their services and products in a way that is strengthening their foothold in the market. Market players are particularly focusing on mergers and acquisitions, partnerships, collaborations, and product launches to strengthen their foothold in the market.
Furthermore, the neobanking model also offers a low-cost structure, easy accessibility, and advanced services. Its cost efficiency is primarily driven by the low real estate and distribution costs, less complex IT systems, and streamlined operating models. Venture capitalists and equity investors are focusing on the market opportunities and investing in neobanks. For instance, according to the MEDICI India Fintech report 2020, India’s neobank start-ups raised more than USD 200 million in 2020.
US Neobanking Market is poised to grow at a sustainable CAGR for the next forecast year.
Global Market Size
USD 36.14 billion
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Neobanking Market is segmented based on the account type, application, and region. On the basis of account type, Neobanking Market is segmented into business account and savings account. On the basis of application, the global neobanking market is segmented into enterprise, personal and others. Based on the region Neobanking Market is segmented as North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
Neobanking Market Analysis by Account type
The business account segment dominated the market in 2021 and held the largest revenue share of more than 65.0%. Various businesses across the globe are adopting neobanking as the preferred way of payment for bulk pay-outs. Moreover, the ability of the neobank platforms to offer simplicity and ease of processes in disbursals to vendors and other stakeholders by reducing human intervention is expected to further drive the growth of the segment. The savings account segment witnesses the fastest CAGR over the forecast period.
Neobanking Market Analysis by Application
The enterprises segment dominated the market in 2021 and accounted for more than 52% share of the global revenue. These platforms offer enterprise-related services, such as credit management, and asset management. Various neobank services providers for SMEs are making efforts to enhance their product portfolio through acquisitions aimed toward providing a better customer experience. For instance, in December 2021, Open, an SME Neobanking platform provider, announced the acquisition of FININ, a consumer neobanking platform, for USD 10 million in cash and stock deal.
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The Europe region dominated the global market in 2021 and accounted for over 30% share of the global revenue. The regional market growth can be attributed to the development of multiple innovative technologies and the early adoption of new technologies. Moreover, companies are focused on launching product platforms and entering into partnerships to strengthen their market position. Various neobanks in the region have launched brick-and-mortar distribution channels to establish 020 types of distribution, thereby creating market growth opportunities.
Asia Pacific is expected to emerge as the fastest-growing regional market over the forecast period. The growing adoption of internet services, coupled with the increased use of smartphones, is expected to accelerate the market growth. In addition, factors such as easy and convenient banking services and the rise in digital-only banks across countries including Japan, India, and China are expected to further contribute to the growth of the Asia Pacific regional market over the forecast period.
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Neobanking Market Driver
Neobanking Market Restraint
Authenticity and financial security are major restraints which expected to hinder the growth of global neobanking market throughout the period. As neobanks primarily offer basic banking services, it would not be recommended to engage a neobank for any complex financial transactions or assistance, as the lack of face-to-face contact or support may be frustrating.
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Vendors are concentrating on the launch of mobile app-based banks. The major banks have been slower to adapt to new technologies and changing customer needs; however, start-up digital banks have amassed a large user base that actively uses their services. Furthermore, these start-ups are concentrating on creating services that can be easily integrated into business processes. With personalized insights, lower costs, user-friendly interfaces, predictive intelligence, easy accessibility, and simplified processes, neobanks are challenging the universal banking model. Market players are particularly focusing on mergers & acquisitions, partnerships, collaborations, and product launches to strengthen their foothold in the market. For instance, N26 announced the extension of its partnership with Transfer Wise, a technology leader for international payments, to offer international money transfers in over 30 currencies through the N26 app.
Top Players in the Global Neobanking Market
Neobanking Market Recent Developments
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Co-relates, and Analyses the Data collected utilizing Primary Exploratory Research backed by the robust Secondary Desk research.
According to our analysis, numerous health tech companies are entering into partnerships with fintech companies to develop and launch products and services to cater to the growing demand for the product. This acquisition was aimed at strengthening Open’s cloud-native enterprise offering named Banking Stack, through which, Open has deployed SME banking platforms for 17 banks. The personal application segment is anticipated to witness the fastest growth over the forecast period. The high penetration rate of smartphones has enabled customers to widely opt for neobanking services owing to convenience and ease of use.
|Market size value in 2021||USD 36.14 billion|
|Market size value in 2030||USD 62 billion|
|Forecast Unit (Value)||USD Billion|
|Regions covered||North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA)|
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Parent Market Analysis
KEY MARKET INSIGHTS
MARKET DYNAMICS & OUTLOOK
Market Size by Region
KEY COMPANY PROFILES
For the Global Neobanking Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Global Neobanking Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Global Neobanking Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
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