Neobanks have gained significant popularity owing to their user-friendly interfaces and range of financial services, which are offered without the traditional constraints associated with physical banks. These digital banks provide convenient access to banking services through smartphones and internet connectivity.
According to Allied Market Research, the global neobanking market was valued at USD 68.95 billion in 2022 and is projected to reach USD 3,251.95 billion by 2032, growing at a CAGR of 47.3% from 2023 to 2032. This growth can be attributed mainly to the increasing digitalization of banking activities and rising demand for digital banking solutions. Despite challenges like security concerns and high implementation costs, investments in fintech are expected to create significant opportunities for market expansion.
During the COVID-19 pandemic, neobanks experienced steady growth as reliance on online banking services increased. Many small and medium-sized enterprises (SMEs) turned to neobanks to meet their working capital needs, contributing to market growth.
The savings account segment is expected to maintain the highest growth rate over the forecast period due to increased adoption of digital banking. In 2022, the business account segment held the largest share, driven by businesses adopting neobanking for bulk payouts; however, the savings account segment is projected to see the highest CAGR due to increasing digitalization in banking activities.
Service type and geography
In terms of service type, mobile banking dominated the market in 2022, driven by demand for personalization and self-service. The loans segment is also expected to exhibit strong growth, fueled by benefits such as streamlined loan processes and faster decision-making.
Based on application, the enterprise segment accounted for the largest share in 2022, thanks to the adoption of neobanking applications for enterprise-related services. The personal segment is expected to see the highest growth rate driven by widespread smartphone usage allowing customers to opt for neobanking services.
Europe currently holds the highest market share, with successful neobanking businesses established in the region. Meanwhile, the Asia-Pacific region is anticipated to experience rapid growth due to government initiatives in the banking sector and increasing mobile and internet penetration in countries like India and China.
Key players in the global neobanking market include Monzo Bank Limited, Movencorp, Inc., WeBank, PRETA S.A.S., N26 AG, Revolut Ltd., Ubank, Pockit LTD, Starling Bank Limited, and Atom Bank PLC. These companies have adopted strategies such as new product launches and collaborations to maintain their market position.
