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] In 2022, European neobank market have generated over 570B transactions. [3]
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:
Zopa Bank Ltd. is a British online bank which offers deposit accounts, personal loans and credit cards. It began as the world's first peer-to-peer lending company in 2005 and gained a full banking licence in 2020. The peer-to-peer side of its business closed in December 2021.
Payoneer Global Inc. is an American financial services company that provides online money transfer, digital payment services and provides customers with working capital.
LendUp was an American online direct lender. It offered payday loans, installment loans, and credit cards to consumers with low credit scores using publicly available data to assess creditworthiness. The company referred to its customers as “the emerging middle class.” LendUp also issued credit cards in partnership with Tom Steyer's Beneficial State Bank.
Viva Wallet is a European Neobank entirely based in Microsoft Azure with presence in 24 European countries. Viva Wallet Holdings owns a Banking License. In January 2022, international media reported that Viva Wallet was the first Greek unicorn startup company after an agreement with JP Morgan Chase was announced. Viva Wallet is part of the Viva Wallet Group, consisting of the subsidiaries Viva Services SA, Viva Payment Services and Vivabank.
In financial services, open banking allows for financial data to be shared between banks and third-party service providers through the use of application programming interfaces (APIs). Traditionally, banks have kept customer financial data within their own closed systems. Open banking allows customers to share their financial information securely and electronically with other banks or other authorized financial organizations such as payment providers, lenders and insurance companies.
Revolut is a global neobank and financial technology company with headquarters in London, UK that offers banking services for retail customers and businesses. It was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. It offers products including banking services, currency exchange, debit and credit cards, virtual cards, Apple Pay, interest-bearing "vaults", personal loans and BNPL, stock trading, crypto, commodities, human resources and other services.
N26 is a German neobank headquartered in Berlin, Germany. N26 was founded in 2013 by the Rocket Internet incubator and currently operates in various European Union member states that are members of the Single Euro Payments Area (SEPA). N26 provides a free basic transaction account and a debit card, with overdraft and investment products and premium accounts available for a monthly fee.
Monese is a British company that offers current accounts and money transfer services as an alternative to traditional banks. The mobile-only service provides accounts in Pounds sterling, Euros and Romanian leu, and is available in 31 countries across the European Economic Area. As of January 2020, it has over 2 million customers.
Plaid is a financial services company based in San Francisco, California. The company builds a data transfer network that powers fintech and digital finance products.
Auka is a Norwegian, VC-backed financial technology company. Its PSD2 compliant technology platform enables banks to issue white label mobile payments products to their private and merchant customers.
Challenger banks are small, recently created retail banks that compete directly with the longer-established banks in the UK, sometimes by specialising in areas underserved by the "big four" banks. As well as new entrants to the market, some challenger banks were created following divestment from larger banking groups or wind-down of a failed large bank.
Zeta is a next-gen banking tech company by founders Bhavin Turakhia and Ramki Gaddipati in 2015. The company provides credit and debit card issuer processing, BNPL, cloud banking, and "mobile experiences". Zeta provides its products to banks and fintechs globally.
Up, also known as Up Money and Up Banking, is an Australian neobank based in Melbourne, Victoria, Australia with more than 700,000 mostly young Australian customers.
Chime Financial, Inc. is a San Francisco–based financial technology company that partners with regional banks to provide certain fee-free mobile banking services. The company offers early access to paychecks, negative account balances without overdraft fees, high-yield savings accounts, peer-to-peer payments, and an interest-free secured credit card. Chime earns the majority of its revenue from the collection of interchange fees on debit card transactions.
Current is an American financial services and software development company (FinTech) based in New York City. It provides mobile banking services through its partner bank, Choice Financial Group.
Maya, is a Filipino financial services and digital payments company based in Metro Manila, Philippines.
Tonik Digital Bank, Inc., commonly known as Tonik, is an all-digital bank which was launched in the Philippines in 2021, notable for being the first all-digital bank, or "neobank" in Southeast Asia. Its consumer products range from deposits, payments, debit cards, and loans. It operates with its own bank license issued by the Bangko Sentral ng Pilipinas (BSP), with deposits insured by the Philippine Deposit Insurance Corporation (PDIC). Its holding company is Singapore-based Tonik Financial Pte Ltd.
bunq B.V. is a Dutch fintech and neobank licensed in the Netherlands within the European Union and operating in 30 European countries. It was founded in Amsterdam where its headquarters are currently located.
Airwallex is a multinational financial technology company offering financial services and software as a service (SaaS). Founded in 2015 in Melbourne, Australia and currently based in Singapore, the company is a financial technology platform providing cross-border payments and financial services to businesses through a proprietary banking network and its API. It also provides services and products such as business accounts, expense cards, and payroll, among others. It was Australia's third technology unicorn company overall. With a valuation of US$5.5 billion, as of 2022, the company processed $50 billion in annualized transactions.
Monobank is a Ukrainian direct bank. Operating since 2017, serving more than 7 million customers in Ukraine. It is the first online bank without traditional branches in Ukraine.