CAN'T BEAT 'EM, JOIN 'EM? THE RISE OF THE NEO BANK
The number of neo-banks are rapidly increasing, as is the threat to existing banks’ market share and revenues. What makes these new market entrants so special? In these highly-competitive digital times, neo-banks offer an exciting alternative to existing legacy banks: they are typically mobile-only, built on low cost, greenfield tech and offer a modern and dynamic customer experience.
In the UK, we have seen a lot of neo-bank activity recently. Monzo has hit 500,000 customers1, Starling Bank is now offering business solutions and Tide will soon provide an international payments service2. In Europe, we’re similarly seeing new players emerge, such as N26, a mobile retail bank, and Penta, also German, but aimed at small to medium business customers.
The message from the neo-banks to incumbents is clear: we’re here to stay and we’re coming for your clients.