Countries Covered: Australia, Brazil, Canada, Colombia, Denmark, France, Germany, Hong Kong, Ireland, Italy, Mexico, Poland, Portugal, Romania, Russia, Singapore, South Korea, Spain, UK, United States.
Publication Date: 02/02/2023
- What are the top three trends in the Neobanking landscape globally in 2022?
- Who are the key players in neobanking across the globe in 2022?
- What share of banked consumers had financial relationships with neobanks in 2021?
- What is the specific consumer type that is the readiest to switch to a Neobank?
- What is the forecasted share of adults with a digital-only bank account in 2027?
Despite the growth in the adoption of neobanks among consumers, traditional banking remains dominant: new yStats.com report.
The adoption of neobanks was accelerated by the pandemic
The COVID-19 pandemic had a long-lasting impact on several markets and neobanking is no exception. The pandemic, with social distancing and lockdown measures in place, increased the shift of consumers towards digital payments and fewer in-person activities, as reported in the new yStats.com publication. The share of consumers opting to use fully-remote neobanks for their financial relationships has increased worldwide. The amount of venture capital funding for digital banking also increased significantly throughout the course of the pandemic, more than doubling between early 2020 and mid-2021 and has continued to increase ever since, while many other industries suffered decreases in the same period. Post-pandemic, the neobanking market is projected to grow even further. The global market size of neobanks is estimated to almost double from 2020 to 2022, with the market size of retail and corporate digital banking forecasted to almost triple between 2020 and 2027.
Neobanks appeal to younger consumers in Europe and the U.S.
Europe has been a region with continuous developments and the use of neobanks. Nonetheless, consumers from European countries still have the strongest trust in traditional banks, with a high double-digit percentage of surveyed European consumers trusting a traditional bank as their primary provider mostly or completely. The share of banking service consumers from Europe having financial relationships with neobanks was close to one-third lower than the global average. According to a survey cited in the yStats.com publication, only a single-digit percentage of those surveyed in European key markets listed neobanks as their principal bank. Furthermore, neobanks in Europe currently appeal more to the younger generations, with over three-quarters of banking consumers who switched to digital banks during the pandemic being aged 16-34. The same trend can be observed in the United States, where adults aged 18-24 and 25-34 had the highest shares of digital-only banking users among all age groups in the country. Between October 2020 and January 2022, U.S. Gen Z and Millennials displayed the biggest growth among banking consumers whose primary checking account was with a digital bank.