The global Neobanking Market size is expected to reach USD 722.60 billion by 2028, according to a new report by Grand View Research, Inc. It is anticipated to register a CAGR of 47.7% from 2021 to 2028. The market growth is driven by various factors, such as lower interest rates as compared to traditional banks, improved user convenience, and favorable government regulations. The demographic shift toward digitization, coupled with escalating demand for digital apps across the FinTech industry, is also expected to boost the market growth over the forecast period.
The financial industry is focusing on integrating technology with financial operations and creating customer-centric services. As a result, new entrants such as neobanks are making a huge impact on the financial industry. Neobanking supports businesses in bringing down operational costs and increasing their profit margin.
Factors such as the accelerated expansion of the customer base, innovative revenue generation and modernization models, and growing mergers and acquisitions activities are expected to significantly contribute to the market growth over the forecast period. Neobanks enable customers to save money, especially on international transactions, and efficiently manage their finances. Neobanks are creating an ecosystem of services around their infrastructure, which is shifting the banking value from the branches to their API layer, thereby enabling users to carry out most of their banking activities on the app.
The less complex IT systems and streamlined operating models of neobanks are some factors creating growth opportunities for the market. Neobanks also have fewer legacy compliance issues compared to traditional banks. Moreover, neobanks are adopting open APIs to offer a seamless experience to their customers and explore opportunities for expanding their customer streams and revenue.
Related Press Release @ Neobanking Market Report
Neobanking Market Report Highlights
- The ability of neobanks to offer a faster and transparent model and their low-cost structure are the key factors influencing the market growth
- The growing adoption of mobile and digital banking as the mode of payment by small and medium-sized enterprises and large enterprises is expected to propel the growth of the business account segment over the forecast period
- Factors such as reduced reloading fees, no withdrawal expenses, no monthly fees, and low cost of transactions are expected to contribute to the growth of the personal application segment
- Europe dominated the market in 2020 and is expected to retain its position over the forecast period, owing to the entry of a large number of new vendors in the regional market