Neobanking Market Analysis, Size, and Share by 2031

The neobanking market is anticipated to expand at a CAGR of 59.4% from 2025 to 2031.

Neobanks operate entirely online, with no physical infrastructure, and rely on fintech to offer banking services.

Neobanking Market Analysis

The neobanking industry consists of technology-based enterprises that exclusively provide digital banking services. This can encompass everything from bill payments to mobile check deposits. These financial organizations operate entirely online, with no physical branches, and offer all banking services and more digitally. Neobanks use technology such as artificial intelligence (AI), automation, and cloud computing to provide highly personalized services at cheaper costs. A neo-bank provides a digital banking solution that is often mobile-first and branchless, with the goal of disrupting a certain segment of the financial services industry using customer-centric and technology-driven approaches. The “neobanking market analysis” has been performed by considering the following segments: account type, and application.

Neobanking Industry Overview

• Neobanks are digital financial institutions that provide a wide range of banking and financial services. Neobanks operate entirely online, with no physical infrastructure. Neobanks rely on fintech to offer banking services.
• Neobanks often offer all of the primary services that traditional banks do, including savings and checking accounts, payment, credit cards, fund transfer services, vehicle and personal loans, mortgages and investments, and insurance products.
• The global neobanking market is growing because of the increasing digitalization of banking processes and demand for digital banking solutions. Convenience Offered to Customers, and Best Interest Rates Offered Over Traditional Banks are among the factors contributing to the growing neobanking market size. However, low profitability impedes the neobanking market growth.
• Furthermore, the increased use of mobile banking has a beneficial impact on market growth. However, the neobanking market's expansion is hampered by security and privacy concerns, as well as hefty implementation costs. On the contrary, increased investments in the fintech industry are likely to provide lucrative prospects for market expansion over the forecast period, and the neobanking market size is expected to reach US$ 3000 billion by 2031.

Neobanking Market Driver

Growing Demand for Digital Banking Solutions to Drive the Neobanking Market

• As digital technologies become more widely adopted, consumers expect efficient and convenient banking services. Neobanking service providers offer solutions that enable banks and financial institutions to provide digital banking services such as mobile banking, online banking, and digital payments, hence driving market growth in this field.
• Furthermore, banks and other financial institutions are prioritizing customer experience improvements in order to stay competitive in the market. Customers benefit from tailored, seamless experiences with neobanking solutions, which drives demand for them.
• several banks and financial institutions use BPOs to better manage their business operations by improving collaboration, simplifying compliance, increasing efficiency, and managing risks. Furthermore, Business process outsourcing (BPOs) are becoming increasingly popular because they provide superior data planning and streamlining on a single platform. This helps to control operating costs, improve decision-making, and boost sales.
• The usage of digital technology in banking is likely to increase in the future years, as banks focus more on enhancing operational and business process efficiency. This is expected to boost the expansion of the neobanking market over the forecast period. And the neobanking market trends include leverage of AI and ML for fraud detection.

Neobanking Market Report Segmentation Analysis

• Based on the account type, the neobanking market is segmented into business and savings. The business segment is expected to hold a substantial neobanking market share in 2023.
• Various businesses throughout the world are choosing neobanking as their preferred method of payment for large payouts. Furthermore, the capacity of neobank platforms to simplify and streamline processes in disbursements to suppliers and other stakeholders by decreasing human participation is projected to support the segment's growth.
•  The savings account segment is predicted to have the fastest CAGR during the projection period. Several health tech companies are forming alliances with fintech firms to create and market goods and services to meet the expanding demand for the product.
• For example, in November 2021, Fedo, a health IT startup, announced the creation of a health savings account called Fedo HSA in collaboration with Open, a neobank. Fedo HSA intended to offer combined accounts through this cooperation that would assist consumers in meeting their required spending by combining insurance, smart savings, and a line of credit in savings accounts with health credit and debit card capabilities.

Neobanking Market Geographic Analysis

The scope of the neobanking market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. In terms of revenue, APAC dominated the neobanking market share. Asia Pacific (APAC) is experiencing rapid growth and is anticipated to hold a significant neobanking market share. The region's significant economic development, growing population, and increasing focus on financial inclusion across diverse economies have contributed to this growth. The early acceptance of new technologies and the creation of several novel technologies are responsible for the growth of the regional market. In addition, corporations are concentrating on initiating product platforms and forming alliances to fortify their market standing. In order to create an O2O form of distribution and open up market expansion potential, several neobanks in the region have started to establish brick-and-mortar distribution channels.

Neobanking Market Report Scope

The " Neobanking Market Analysis" was carried out based on the account type, application, and geography. In terms of account type, the market is segmented into business and savings. Based on application, the neobanking market is segmented into enterprises, personal, and others. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America. The neobanking market report includes company positioning and concentration to evaluate the performance of competitors/players in the market.

Neobanking Market News and Recent Developments

Companies adopt inorganic and organic strategies such as mergers and acquisitions in the neobanking market. The neobanking market forecast can help stakeholders plan their growth strategies. A few recent key market developments are listed below: 

• In June 2023, Zepz, a London-based fintech company, created a neobanking solution for migrants living in the US. Sendwave, a Zepz-owned remittance service, has introduced Sendwave Pay. Sendwave, based in Boston, runs a digital remittance service in East and West Africa. It was acquired by fintech business Zepz in 2021, which also owns the money transfer brand WorldRemit. Sendwave Pay attempts to make sending money to Africa easier. It is an FDIC-insured bank account that includes a debit card. Account users can save up to 25% on transaction fees for remittances to Kenya, Ghana, and several other African nations. Such a product launch aims to leverage the resources of both companies to drive the growth and accessibility of financial services for individuals and businesses.

[Source: Zepz, Company Website]

• In February 2022, Stashfin, a neobanking platform, published its latest brand video, which features an all-in-one card designed to fulfill the demands of every consumer. The film, created by Havas Worldwide India (Creative), highlights the unique proposition of Stashfin's all-in-one card, which provides fast funds, free ATM withdrawals, cashback offers, and welcome rewards. With a brand promise of 'Nobody in India should be credit-starved,' Stashfin has been aiming to increase the financial inclusion of diverse client sectors that are difficult to accept by traditional banking institutions. The company also assists underrepresented groups in developing their credit footprints, allowing them to enhance their standard of living.

[Source: Stashfin, Company Website]

Neobanking Market Report Coverage & Deliverables

The market report on “

Neobanking

• Market size & forecast at global, regional, and country-level for all the key market segments covered under the scope.
• Market dynamics such as drivers, restraints, and key opportunities.
• Key future trends.
• Detailed PEST & SWOT analysis
• Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
• Industry landscape and competition analysis covering market concentration, heat map analysis, key players, and recent developments.
• Detailed company profiles.

Neobanking Report Scope