Neobanking Market Size, By Account Type (Business Account, Savings Account), By Service (Mobile Banking, Payments & Money Transfer, Checking/Savings Account, Loans), By Application (Enterprises, Personal), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2022 - 2028
The neobanking market is projected to exhibit exponential development by 2028 on account of widespread integration of blockchain & AI technologies into banking. In addition, growing investments in fintech, along with burgeoning number of fintech startups across the globe, are likely to further augment industry uptake over the forecast timeline.
Neo-banks have profoundly changed the traditional banking system by using technology and artificial intelligence (AI) to provide consumers with a variety of personalized services. Rising penetration of smartphones and internet services globally has propelled market expansion over the past few years.
Furthermore, to accommodate the surging demand for convenient digital banking services, industry players have been employing gainful strategies, which has positively influenced the overall business scenario. For instance, in March 2022, Orange Bank, a major neobanking institution, extended its partnership agreement with electronics giant Samsung Electronics Co., Ltd. to enhance customer experience and increase product life. The agreement was intended to cut down on mobile equipment waste, expand 5G services, and improve end-user multi-device digital experiences.
To cite another instance, in August 2021, NuBank, a Brazil-based fintech bank, announced the acquisition of PIX payment, an instant payment platform formerly managed by the Central Bank of Brazil. The deal enabled NuBank to broaden its payment solutions for e-retail by leveraging Pix’s Spin Pay instant payments platform.
The neobanking market has been segmented on the basis of application, account type, service, and region. With respect to service, the market has further been divided into loans, mobile banking, checking/savings account, and payment/money transfer.
The mobile banking sub-segment is speculated to reach a substantial valuation by the end of 2028, progressing at a CAGR of approximately 46.6% over the assessment period. This growth is attributed to the increased ease of banking with innovative neobank mobile apps.
From the regional point of view, the Latin America neobanking market accounted for nearly 7.5% of the overall industry revenue in 2021 and is anticipated to garner significant gains by the end of the review timeline. Mounting penetration of smartphones and continuously improving infrastructure for supporting digital-only banking in LATAM are likely to drive regional market expansion over the following years.
The Middle East & Africa neobanking market is expected to develop at a CAGR of more than 44.4% over the forecast timeframe to attain a considerable revenue by the end of 2028. Prevalent shift of young consumers towards next-gen challenger banks and rising affinity towards digital-only banking channels are set to bolster market growth in MEA in the coming time period.
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