Neobank and Challenger Bank Maps present the digital banking boom

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Since 2010, more than 310 neobanks have launched around the world, attracting a estimated at 39 million users worldwide. Of more than 300 companies never launched, 256 were active at the end of 2020, of which nearly half (111) were located in Europe, according to data from European management consulting firm Exton Consulting. show.

Inside Financial Services: Neobanks 2021, Exton Consulting, 2020

Neobanks, also known as online banks, virtual banks, or digital banks, are a type of direct banking that operate exclusively online without traditional physical branch networks. These fintech-based financial providers challenge traditional banks by offering services digitally either through their own banking license or through banking partners.

Europe leads the neobank

In Europe, the United Kingdom is home to 37 neobanks, more than the entire Asia-Pacific region (APAC) (34) or Africa and the Middle East (21), making it a neobank power.

Revolut is perhaps the UK’s most famous neobank. Launched in 2015, Revolut provides bank accounts, money management tools, stock trading and more through a mobile app. Since its inception, the startup has attracted over 15 million retail clients and has expanded to over 35 countries with India is now next in line.

This year Revolut applied for a UK banking license and is also working on obtaining a US banking license.

The startup is currently seeking to raise a new round of funding that would value the company between US $ 10 billion and US $ 15 billion, Sky News reported Last week. The new valuation would make it one of the UK’s 2 most valuable venture capital (VC) firms, according to to CB Insights data.

In the rest of Europe, 74 neobanks were active at the end of 2020, making the region the most developed in terms of digital banking.

N26 is one of the notable players serving more than seven million customers in 25 markets. N26, which is from Germany, is a mobile bank with its own full European banking license from the Federal Financial Supervisory Authority (BaFin). It provides a free basic checking account and debit card, with overdraft and investment products available and premium accounts for a monthly fee.

N26 operates in various Member States of the Single Euro Payments Area (SEPA) and in the United States where it provides banking services in partnership with Axos Bank. This year, N26 will launch N26 Insurance within the framework of a new API-based strategy which will seek to allow partners to integrate their products themselves, and to facilitate data transfers and transactions between N26 and its partners.

In Finland, Holvi has created one of the best performing digital banks in Europe for the self-employed, the self-employed and small businesses. Founded in 2011, Holvi provides an online platform for sales, invoicing and cash flow monitoring services, as well as for traditional banking services. Holvi was acquired by Spanish banking giant BBVA in 2016 before to be sold to Keru Fintech Investments, an investment company created by one of the founders of Finnish fintech in February 2021. Holvi serves some 200,000 customers.

Bunq, a challenger bank from the Netherlands, had been named by the Financial Times as one of the fastest growing fintechs in Europe with 2019 revenue reaching € 8.8 million, a compound annual growth rate of 280%. It is supposedly close to unicorn status.

This year, Bunq became the first challenger bank to join the TARGET Instant Payment Settlement (TIPS) network developed by the European Central Bank, allowing its users to access instant payments with banks both in its home country and throughout Europe .

In France, Qonto is a neobank appreciated by entrepreneurs and small and medium-sized enterprises (SMEs) portion some 120,000 companies in four markets, namely France, Spain, Germany and Italy.

Neobanks around the world

Europe is ahead of other regions in neobank innovation, but other sites are quickly catching up.

the Challenger Bank Card by Swiss strategy consultancy Aperture, updated earlier this month, showcases a burgeoning digital banking landscape that has taken the world by storm.

In Asia-Pacific, rule changes are opening up the market to new entrants in jurisdictions such as Singapore, Hong Kong, the Philippines and Indonesia.

Singapore and Hong Kong, two major financial centers in the region, have already granted their digital banking licenses. The eight virtual banks of Hong Kong are live, while in Singapore, the central bank expects all four digital banks to begin operations in early 2022.

The Philippines approved a new license category for digital banks in November 2020 and, in February 2021, received two applications. In Indonesia, guidelines for digital banks are waiting to be released by mid-2021.

South America is another region that has seen a thriving neobank landscape. Data from Dutch consulting firm Fincog shows that as of January 2021, the region was home to more than 30 neobanks and live digital banks that served more than 50 million customers.

Brazilian neobank Nubank is the largest financial technology company and the most valuable venture capital (VC) in the entire Latin American region, valued at US $ 25 billion, according to CB Insights data.

Aperture Challenger Bank card, April 2021:

The Challenger Bank Map, Aperture, via LinkedIn, April 2021

The Challenger Bank Map, Aperture, via LinkedIn, April 2021

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