The global neo and challenger bank market is projected to reach a valuation of approximately $578 billion by 2027, at a compounded annual growth rate (CAGR) of about 46.5% from 2019 to 2027. This, according to a recent report from Facts and Factors Market Research, titled Neo and Challenger Bank Market By Type and By Applications (Personal and Business): Global Industry Perspective, Comprehensive Analysis, and Forecast, 2018 – 2027.
As mentioned in the report, the global neo and challenger bank market was worth only around $18.6 billion back in 2018 and is now projected to surpass half a trillion dollars by 2027.
the global neo and challenger bank market was worth only around $18.6 billion back in 2018 and is now projected to surpass half a trillion dollars by 2027 #Fintech #DigitalBanking
Neobanks are direct all-digital banks that offer streamlined online banking services and dedicated customer support services. Neobanks usually offer financial services via user-friendly mobile apps and personal computers.
Neobanks have increasingly been using artificial intelligence (AI) and machine learning (ML) to offer improved banking services. Challenger banks are mostly small retail banks that are competing for market share with larger and more established financial institutions.
A recent study by Juniper Research revealed that by 2024, the number of digital banking users will exceed 3.6 billion, which would be a notable 54% increase from the present 2.4 billion neobank customers in 2020. This impressive growth is mainly due to the rise of all-digital banking challengers and the digital transformation movement.
Digital banks are creating new financial industry standards when it comes to offering better usability, and are introducing useful features like card management and personal money management. For digital bank users, this will come as no surprise.
A recent study by the consulting firm Capco reviewed the mobile banking products of 16 European and UK-based financial service providers. Capco found that challenger banks including Starling Bank, N26, Monzo and Revolut have been consistently outperforming the majority of traditional banks when it comes to providing better usability and user-friendly services.