Neobanks in Europe

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The development of neobanks in Europe is a trend in the European financial landscape beginning in the 2010s. Neobanks are a type of digital-only bank that offer financial services primarily through mobile and web applications, with little or no reliance on physical branches. The trend was 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]

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In 2024, as a part of Instant Payments Regulation, European authorities made a significant step to level the regulatory field for neobanks. Before that, many neobanks who didn't have a bank status (like EMIs or other non-bank financial institutions) couldn't access central bank-operated payment systems like TARGET. TARGET Services are essential to many money-transferring operations. With this new regulation, non-bank payment service providers (PSP) meeting certain requirements can connect to these systems. [3] The initiative should help neobanks and fintechs to provide instant credit transfers in euros and compete with traditional banks. [4]

Growth of Neobanks in Europe

The neobank industry in Europe has experienced rapid growth in the 2010s, with several new companies entering the market and attracting millions of customers. Key factors of their growth include:

  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.[ citation needed ]
  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] [5] [6]

Some European neobanks

  1. Revolut (United Kingdom) launched in 2015 is Europe's largest neobank with 50 million customers worldwide, [7] offering services such as personal accounts with local IBANs, debit cards, currency exchange, and investment products. [8]
  2. T-Bank (Russia) launched in 2006, it is the second largest neobank in the world by number of clients and the largest in Europe, with more than 26 million clients and offering a full range of banking services. [9] [10] [11]
  3. Monobank launched in 2017 and serves more than 8 million customers in Ukraine. [12]
  4. N26 is a German neobank that has expanded its operations across Europe with a focus on Europe. [13]
  5. Monese is a London-based fintech which secured 35M from HSBC in 2022. [14] [15]
  6. bunq (the Netherlands) was founded in 2012 and is currently operating in more than 15 European countries, offering services such as personal accounts, debit cards, joint accounts, currency exchange, and savings accounts. [16] Bunq is Europe's second largest neobank with 9 million customers. [17] [18]
  7. Wise (company) (United Kingdom) is a foreign exchange financial technology company.
  8. Vivid Money is a Germany-based neobank. It was launched with support from solarisBank and Visa. [19] [20] In 2024, Vivid decided to stop onboarding new customers via solaris. [21] In the same year, Vivid acquired Luxembourg-based fintech Joompay, taking over company's license. [22]
  9. Qonto is a French neobank that specialises in freelancers and Small and medium-sized enterprises (SMEs) and operates in France, Germany and Spain. [23]
  10. Finom is a digital business banking services provider based in the Netherlands. This challenger bank offers bank accounts to companies registered in Germany, France, Spain, Belgium, Italy and the Netherlands. [24]

References

  1. 1 2 "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. ↑ Bank, European Central (2024-07-19). "Eurosystem sets policy on access by non-bank payment service providers to its central bank payment systems" (in German).{{cite journal}}: Cite journal requires |journal= (help)
  4. ↑ "EU agrees game-changing deal for instant payments". Finextra Research. 2023-11-08. Retrieved 2025-07-29.
  5. ↑ "Open banking in Europe: The impact of the Revised Payments Services Directive on Solarisbank and Insha" (PDF).
  6. ↑ Padmanabhan, Arun (2021-10-07). "Explained: Neobanks, the next evolution of banking". The Economic Times. ISSN   0013-0389 . Retrieved 2023-04-12.
  7. ↑ "Revolut hits 50 million customer milestone globally on mission to build world's first truly global bank". Revolut. 19 November 2024. Retrieved 27 November 2024.
  8. ↑ Thompsett, Louis (2024-08-20). "Revolut Reaches US$45bn Valuation After Successful Employee Share Sale". fintechmagazine.com. Retrieved 2024-09-12.
  9. ↑ "What is Tinkoff Bank? The Russian disruptor targeting 20 million customers". NS Banking. 2019-08-19. Retrieved 2024-02-24.
  10. ↑ "Stocks Shares". The Telegraph. 2023-08-31. ISSN   0307-1235 . Retrieved 2024-02-24.
  11. ↑ "TCS Group Holding PLC releases highlights for 3Q'22 and 9M'22 performance — Tinkoff news". Tinkoff (in Russian). Retrieved 2024-02-24.
  12. ↑ "Дашборд monobank". monobank – мобільний банк (in Ukrainian). Retrieved 2024-02-24.
  13. ↑ "An update from N26 US". An update from N26 US. 18 April 2023.
  14. ↑ Sawers, Paul (2022-09-20). "European neobank Monese nabs $35M from HSBC". TechCrunch. Retrieved 2023-04-12.
  15. ↑ 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.
  16. ↑ McKenzie, Ian (2024-04-28). "bunq for Personal Banking: In-depth Review". Fintech Compass. Retrieved 2024-05-10.
  17. ↑ Pugh, Alex (May 6, 2022). "Dutch challenger Bunq becomes EU's second largest neobank with Tricount acquisition". Fintech Futures.
  18. ↑ "bunq hits 9 million users across Europe, surpasses €4.5 billion in deposits". bunq. July 18, 2023. Retrieved July 25, 2023.
  19. ↑ 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.
  20. ↑ "Vivid Money taps solarisBank and Visa for launch in Germany". Finextra Research. 2020-06-08. Retrieved 2023-04-28.
  21. ↑ Hunter, John Stanley (2024-02-09). "Vivid zieht Hunderttausende Konten bei Solaris ab". FinanceFWD (in German). Retrieved 2025-07-29.
  22. ↑ "Handelsblatt". www.handelsblatt.com. Retrieved 2025-07-29.
  23. ↑ "Qonto launches its digital bank accounts for small companies". TechCrunch. 5 July 2017. Retrieved 2018-12-19.
  24. ↑ McKenzie, Ian (2024-02-06). "Finom Review: Business Banking, Expense Management & Invoicing". Fintech Compass. Retrieved 2024-06-05.
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