Finance:Neobanks in Europe

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The development of neobanks in Europe is a trend in the European financial landscape beginning in the 2010s. Neobanks are a type of digital-only bank that offer financial services primarily through mobile and web applications, with little or no reliance on physical branches. The trend was driven by advancements in technology, changing consumer preferences, and supportive regulatory frameworks. Neobanks provide a range of services, including personal accounts, loans, and payment services, with a focus on user-friendly interfaces, low fees, and innovative features.[1][2] In 2022, European neobank market have generated over 570B transactions.[3]

Growth of Neobanks in Europe

The neobank industry in Europe has experienced rapid growth in the 2010s, with several new companies entering the market and attracting millions of customers. Key factors of their growth include:

  1. Technology advancements: The widespread adoption of smartphones and high-speed internet has made it easier for consumers to access banking services through digital channels, paving the way for the rise of neobanks.
  2. Changing consumer preferences: As consumers increasingly demand personalized, user-friendly experiences, neobanks have capitalized on this trend by offering innovative financial products and services tailored to the digital age.[citation needed]
  3. Supportive regulatory environment: The European Union's Revised Payment Services Directive (PSD2) has facilitated the entry of non-traditional financial players, such as neobanks, into the market by enabling third-party providers to access customer account data from traditional banks with customer consent. This has allowed neobanks to develop innovative solutions and compete with established banks.[1][4][5]

Some European neobanks

  1. Revolut (United Kingdom) launched in 2015 is Europe's largest neobank with 30 million customers worldwide, offering services such as personal accounts with local IBANs, debit cards, currency exchange, and investment products.[6]
  2. N26 is a German neobank that has expanded its operations across Europe with a focus on Europe.[7]
  3. Monese is a London-based fintech which secured 35M from HSBC in 2022.[8][9]
  4. bunq (Netherlands) is founded in 2012 and operating in 30 European countries, offering services such as personal accounts, debit cards, currency exchange, and savings, and is expanding in the USA.[10] Bunq is Europe's second largest neobank with 9 million customers.[11][12]
  5. Wise (United Kingdom) is a foreign exchange financial technology company.
  6. Vivid Money is a Germany based neobank with support from Berlin-based solarisBank and Visa.[13][14]
  7. Qonto is a French neobank that specialises in freelancers and Small and medium-sized enterprises (SMEs) and operates in France, Germany and Spain.[15]

References

  1. ↑ 1.0 1.1 "Europe's neobanks are outpacing legacy banks in app adoption" (in en). 2023-02-21. https://fintechmagazine.com/banking/europes-neobanks-are-outpacing-legacy-banks-in-app-adoption. 
  2. ↑ "Neobanks across Europe fatten up as VCs demand profits" (in en-GB). 2023-03-22. https://tech.eu/2023/03/22/neobanks-across-europe-fatten-up-as-vcs-demand-profits/. 
  3. ↑ "Europe Neobanking Market Size & Share Analysis - Industry Research Report - Growth Trends" (in en). https://www.mordorintelligence.com/industry-reports/europe-neobanking-market. 
  4. ↑ "Open banking in Europe: The impact of the Revised Payments Services Directive on Solarisbank and Insha". https://mpra.ub.uni-muenchen.de/110763/1/MPRA_paper_110763.pdf. 
  5. ↑ Padmanabhan, Arun (2021-10-07). "Explained: Neobanks, the next evolution of banking". The Economic Times. ISSN 0013-0389. https://economictimes.indiatimes.com/tech/trendspotting/explained-neobanks-the-next-evolution-of-banking/articleshow/86836735.cms. 
  6. ↑ "Revolut surpasses 30 million retail customers worldwide" (in en-GB). 2023-06-01. https://www.revolut.com/news/revolut_surpasses_30_million_retail_customers_worldwide. 
  7. ↑ "An update from N26 US". 18 April 2023. https://n26.com/en-us. 
  8. ↑ Sawers, Paul (2022-09-20). "European neobank Monese nabs $35M from HSBC" (in en-US). https://techcrunch.com/2022/09/20/european-digital-bank-monese-nabs-35m-from-hsbc/. 
  9. ↑ O'Hear, Steve (2015-09-21). "Monese Launches In U.K. To Let Immigrants And Expats Get A Mobile Banking Account" (in en-US). https://techcrunch.com/2015/09/21/moneseasy-peasy/. 
  10. ↑ "We're coming to the US | bunq" (in en). https://www.bunq.com/us. 
  11. ↑ Pugh, Alex (May 6, 2022). "Dutch challenger Bunq becomes EU's second largest neobank with Tricount acquisition". https://www.fintechfutures.com/2022/05/dutch-challenger-bunq-becomes-eus-second-largest-neobank-with-tricount-acquisition/. 
  12. ↑ "bunq hits 9 million users across Europe, surpasses €4.5 billion in deposits". July 18, 2023. https://press.bunq.com/228171-bunq-hits-9-million-users-across-europe-surpasses-4-5-billion-in-deposits. 
  13. ↑ Lunden, Ingrid (2022-02-07). "Vivid Money, a financial super app, raises $114M at an $886M valuation to expand in Europe" (in en-US). https://techcrunch.com/2022/02/07/vivid-money-a-financial-super-app-raises-114m-at-an-886m-valuation-to-expand-in-europe/. 
  14. ↑ "Vivid Money taps solarisBank and Visa for launch in Germany" (in en). 2020-06-08. https://www.finextra.com/newsarticle/35965/vivid-money-taps-solarisbank-and-visa-for-launch-in-germany. 
  15. ↑ "Qonto launches its digital bank accounts for small companies" (in en-US). 5 July 2017. https://techcrunch.com/2017/07/05/qonto-launches-its-digital-bank-accounts-for-small-companies/. 

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