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The global push for digital acceleration in multiple verticals also applies to the financial services industry
LONDON, July 20, 2021 / PRNewswire / – The growing demand for customer convenience, flexibility, 24/7 accessibility and instant service demand has led to the rise of transformative neobanks and challenger banks seeking to disrupt the status quo current quo. By fully embracing a digital first approach, neo / challenger banks have used innovation to streamline processes and expand new value-added service launches, enabling new levels of convenience and flexibility. According to the global technology market consultancy ABI research, the neo and challenger banks will continue on an impressive growth trajectory, with the user base of the top 57 neo and challenger banks increasing their number of accounts from 155 million in 2020 to 590.6 million in 2026.
“The global push for digital acceleration in a number of verticals applies to the financial services industry as well. Throughout the global pandemic, as banks and mortgage lenders have closed branches and migrated their in-person staff to already overburdened telephony services, the use of banking services and payments were brought to the fore, â€said Sam gazeley, digital security analyst at ABI Research. “Traditional banks are feeling the pressure from their customers to deploy digital solutions for financial services, in competition with other traditional banks as well as with neo / challenger banks. Rather than stifling the neobanks’ march towards innovation, the increased demand for digital solutions during the pandemic has stimulated investor interest in them and increased their visibility in target markets, by onboarding new clients. looking for attractive digital offers. “
Europe has long been favorable ground for the neo and challenger banking market, with the top 19 neobanks (e.g. Revolut, N26 and Monzo) in the region with 49.8 million combined accounts in 2021, which are expected to reach 165.8 million in 2026. North America somewhat imitated Europe and has seen several neobanks gain popularity with clients looking for innovative banking solutions. The top 15 neobanks in the region (for example, Chime, Upgrade, SoFi) will see their number of accounts increase from 56.9 million in 2021 to 162.8 million in 2026. Asia Pacific will show the highest growth rate during the forecast period with a CAGR of 28.2% between 2021 and 2026. This will see the top 9 neo / challenger banks (eg Kakao Bank and K Bank) in the region increase their number of accounts from 22.1 million to 76.6 million over the period. With a significant portion of the unbanked or underbanked population, the Middle East and Africa see the neo bank and the challenger bank in its infancy. The first 4 neo and challenger banks (for example, Nubank and Banco Inter) in the region will see their number of accounts increase from 0.7 million in 2021 to 1.4 million in 2026.
“However, neo and challenger banks won’t have everything in their own way, with a number of traditional banks launching their own digital banks as an entry into new markets or to push back neobanks from their patch. These ramifications will have an advantage. because they concern the trust born from the association of the brand and a considerable war chest for innovation. Confidence being a crucial issue when neo start-ups and challenger banks seek to onboard as many customers as possible and to pivot them towards premium accounts and subscriptions. Financial services tend towards a change in strategy from a physical-digital approach to a digital-physical approach, â€concludes Gazeley.
These results are taken from ABI Research’s Digital First Neo and Challenger Banks Driving Technology Innovation technology analysis report. This report is part of the company’s digital security research service, which includes research, data, and analyst analysis. Based on in-depth primary interviews, Technology Analysis Reports present an in-depth analysis of key market trends and drivers for a specific technology.
About ABI Research
ABI Research provides actionable research and strategic advice to technology leaders, innovators and decision makers around the world. Our research focuses on transformative technologies that are dramatically reshaping industries, economies and the workforce today. ABI Research’s global team of analysts publish groundbreaking studies often years ahead of other technology consulting firms, helping our clients stay ahead of their markets and competitors.
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