Banking without physical bank branches, transfer slips and even online portals? This is possible, as the global success of neobanks proves. They build their business entirely on the customers’ smartphones. Both the account opening and all other financial services are conveniently carried out here via app.
A model that is well received by the European population. As the Statista graphic shows, the neobanks are already being used by millions of people. The largest representative among the European smartphone banks is Revolut, which claims to have around 18 million users, followed by the German N26 (7 million users), Monzo (5 million users) and Starling Bank (2.5 million users). With the exception of the N26 from Berlin, all have their headquarters in London.
The fact that the N26 has been able to show such user growth since it was founded in 2013 is partly due to the openness of Germans to online banking and the widespread use of smartphones. According to a Bitkom survey, around 80 percent of those surveyed in Germany use online banking, and two-thirds of them also use their smartphone to do their banking.
Young people are particularly interested in neobanks
Young people in particular are interested in neobanks. Around 38 percent of the people between the ages of 18 and 29 surveyed by Bitkom stated that they were interested in the smartphone-based form of banking. Among the 30 to 49 year olds it is still 31 percent. The higher the age, the more the rejection of digital banks grows.
The neobanking industry has seen strong growth in recent years. While only a few providers were on the market in 2015 and generated sales of around 600 million US dollars worldwide, industry sales in 2020 will be around 3.6 billion US dollars – and the trend is rising. Some of the neobanks are among the most valuable unlisted financial companies. The most valuable neobank worldwide is the Brazilian Nubank with a valuation of around USD 45 billion in December 2021 – the year before its market value was “only” USD 10 billion.