Market Overview

The Neobanking Market size was valued at around 150.35 billion in 2024 and is expected to reach a value of USD 8669.65 billion by 2034, at a CAGR of 50.0% over the forecast period (2025–2034).

The growing demand for convenience among customers of banks will lead to growth in the neobank market. Neobanks provide banking services online only, and there is no physical presence involved. The platforms are web-based and provide users with the ability to have access to services in real time via websites and mobile apps. The widespread usage of smartphones and the internet across the globe will also lead to further demand for neobanking services.

An increasing number of collaborations between traditional banks and companies to launch neobanking platforms is also fuelling market growth. The collaborations are targeted at enhancing user experience, security, and operational stability. For example, Google Pay co-founders started Fi, a neobank that was created jointly with Federal Bank, in April 2021 to offer instant debit cards and savings accounts to salaried millennials. Technological innovation and the global expansion of internet penetration are enabling financial institutions to offer new online services. Increased use of digital wallets is another force behind interest in online banking.

Visa reports that over one billion mobile money wallets are in use worldwide. Most financial institutions are partnering with mobile wallet firms to offer low-cost money transfer services. Neobanks are increasingly appealing to individual consumers and Small and Medium Enterprises (SMEs) as well, offering services like free debit cards, digital account opening, financial advice, instant payments, electronic bill generation, invoice management, account linking, and GST-compliant invoicing.

In addition, the neobank business model is one that promises cost-effective design, easy accessibility, and pioneering digital features. Low costs are significantly due to investing less on material infrastructure, possessing less complex IT systems, and streamlined processes. The business has captured the imagination of equity and venture capitalists. Neobank startups in India raised over USD 200 million in funding in 2020, states the MEDICI India Fintech report 2020. Growth notwithstanding, neobanks are not without issues, such as a limited suite of services when compared to the traditional banks and continued issues with profitability due to their low-cost service model driven by customer acquisition.

Market Drivers

Increasing Adoption of Digital-Only Banking Platforms

• The growth in the adoption of digital-only banking platforms is one of the key drivers of growth of the neobanking market. As there has been a rise in smartphone penetration, high-speed internet, and tech-aware consumers, demand for mobile and online banking products has also risen. Neobanks provide easy-to-use interfaces, reduced fees, and quick, convenient services that are popular among current banking customers, especially millennials and Gen Z. This trend away from traditional banking channels gains momentum with increased digital literacy and consumers expecting instant financial access.

Rising Demand for Personalized Financial Services

• Increasing demands for customized financial services. Neobanks are employing data analytics and AI features to offer customized financial information, expenses tracking, and budgeting functions. Customers ever more need to experience the customized financial services catering to their unique needs and habits, and neobanks are serving this purpose by offering customized services. Customer customization fuels customer experience and enhances customer engagement, leading to trust and additional usage of digital banking channels.

Market Opportunities

Expansion into Underbanked and Unbanked Populations

• There is considerable potential in the growth into unbanked and underbanked populations. Across much of the globe, much of the population has no access to fundamental financial services because of a lack of banking infrastructure. Neobanks, by virtue of their digital-only business models, can reach these populations more effectively and at lower cost, providing services through mobile applications that obviate the need for physical branches. This can stimulate financial inclusion and create new customer bases.

Integration of Advanced Technologies like AI and Blockchain

• The application of new technologies like AI and blockchain. Neobanks are blessed by adopting new technologies that make them efficient, secure, and customer focused. AI can enable advanced fraud detection, personalized advice, and automated customer service, while blockchain is likely to bring potential benefits in transaction transparency and security. By adopting these technologies, neobanks can compete and differentiate in a changing digital financial landscape.

Market Restraining Factors

Regulatory and Compliance Challenges

• Compliance and regulatory issues are a significant obstacle to the growth of the neobanking market. Having no legacy infrastructure, neobanks still must comply with the same high regulatory demands as incumbent banks. Dealing with geographically separated regulation, the existence of multiple layers of data privacy, and the acquisition of banking licenses is complicated and costly. Furthermore, the rapid innovation in this sector has the tendency to gather speed higher than the pace at which the regulations are revised, leading to ambiguity and regulatory compliance risks.

Limited Customer Trust in Digital-Only Banks

• Limited customer trust in online-only banks, despite their convenience, the majority of customers are still wary of entrusting their finances to non-physical presence organizations. Concerns over data security, fraud, and the long-term viability of new digital banks are some of the reasons for caution in uptake. This is particularly the case among older generations or those with limited experience on digital platforms, which could slow the pace of market growth.

Segmentation Analysis

The market scope is segmented because of by Account Type, by Application.

• By Account Type

Based on the Account Type of the market is segmented into Business Account, Savings Account.

Among the account type segments of the neobanking space, the business account segment has dominated the space. The principal reason behind it is the surging number of startups, SMEs, and freelancers who seek quick, affordable, and fully digitalized financial services. The conventional banks do have complex processes, fees, and terms that straitjacket the smaller firms. Neobanks, however, offer easy opening of accounts, less paperwork, lower or zero fees, and a host of business-focused features—such as expense management, invoicing, payment tracking, and multi-user support.

The requirement for real-time transaction functionality, accounting software integration, and 24/7 digital customer support makes neobanks uniquely attractive to business users operating in dynamic environments. As the trend towards remote working and e-commerce continues to grow, businesses increasingly prefer banking services that can be accessed and managed online exclusively. This shift has accelerated especially post-COVID-19, when businesses shifted to digital-led operations and looked for adaptive banking solutions.

• By Application

Based on the Application of the market is segmented into Enterprises, Personal, Others.

Among the application segments within the neobanking market, the personal segment has been the most dominant. This is primarily due to the swift uptake of digital financial services by personal consumers in pursuing convenience, cost savings, and improved user experience. Personal consumers are drawn towards neobanks because of the simple onboarding process, simplicity of use of mobile apps, zero or low maintenance costs, and support for services such as instant transfers of funds, real-time spending alerts, budgeting apps, and in-app money planning. These all these amenities closely align with digitally fluent consumers, especially millennials and Gen Z, who like digital-first options in daily use.

Mobile phone and high-speed internet expansion has also promoted online banking, and customers are now able to do their business at any time and location. Moreover, the pandemic accelerated the trend of digital channels, forcing several users to try online banking for the first time and to create long-term behavioural shift. Private consumers are the early adopters of new tech, and customer feedback enabled the process of evolution for neobanking platforms to become more consumer centric.

neobanks were able to induct personal consumers using targeted promotional campaigns and social media, mainly offering rewards such as cashback, higher rates of savings, and referral commissions. As money in the form of digital was sought to have more control from consumers, personal application segment was the largest and strongest in neobanking space.

• Regional Snapshots

By region, Insights into the markets in North America, Europe, Asia-Pacific, Latin America and MEA are provided by the study. Europe has led the global neobanking industry, and its success rests mainly on making an early leap in embracing digital banking innovations, a supportive regulation climate, and the dominance by a few older neobank market leaders. Movements such as the Revised Payment Services Directive (PSD2) and Open Banking have boosted the promotion of competition and innovation in the finance industry. These regulations necessitate traditional banks to share customer information (with consent) with third-party providers, allowing neobanks to provide more personalized and integrated financial services. The UK, Germany, and France are all experiencing accelerated digital bank customer growth driven by deep smartphone penetration, digital sophistication, and consumer willingness to embrace web-only financial interfaces.

Conversely, the Asia-Pacific market is likely to be the quickest to grow in the neobanking sector. This is driven by a significant and increasingly digital population, rapid urbanization, as well as significant investment in fintech infrastructure. India, China, as well as Southeast Asian nations are witnessing increased demand for digital financial services, particularly among underbanked individuals as well as small businesses. Government efforts supporting financial inclusion and digital payments like India's Digital India initiative and China's mobile payment system are further fuelling adoption. The growth in number of startups and supportive regulatory updates throughout the Asia-Pacific region also foster an encouraging ecosystem for the expansion of neobanks, positioning the region to witness sustained high growth over the next few years.

List of Companies Profiled

• Atom Bank PLC
• Fidor Bank Ag
• Monzo Bank Ltd.
• Movencorp Inc.
• Mybank
• N26
• Revolut Ltd.
• Simple Finance Technology Corp.
• Ubank Limited
• Webank, Inc.

Key Industry Developments

In January 2024, Nu Mexico partnered with Felix Pago to launch the option to receive money from the U.S.  The partnership simplified the process of sending money from the U.S. to Mexico and transformed the process of cross-border money transfers.

In November 2023, N26 extended its product portfolio by launching an Instant Savings account. The neobank declared that customers in Germany will seek advantage from up to 2.6% interest p.a. with clear conditions and without additional costs or deposit limits involved.

Report Coverage

The report will cover the qualitative and quantitative data on the Global Neobanking Market. The qualitative data includes latest trends, market players analysis, market drivers, market opportunity, and many others. Also, the report quantitative data includes market size for every region, country, and segments according to your requirements. We can also provide customize report in every industry vertical.

Report Scope and Segmentations

Global Neobanking Market Regional Analysis

North America accounted for the highest xx% market share in terms of revenue in the Neobanking market and is expected to expand at a CAGR of xx% during the forecast period. This growth can be attributed to the growing adoption of Neobanking. The market in APAC is expected to witness significant growth and is expected to register a CAGR of xx% over upcoming years, because of the presence of key Neobanking companies in economies such as Japan and China.

The objective of the report is to present comprehensive analysis of Global Neobanking Market including all the stakeholders of the industry. The past and current status of the industry with forecasted market size and trends are presented in the report with the analysis of complicated data in simple language.

Neobanking Market Report is also available for below Regions and Country Please Ask for that

North America

• U.S.
• Canada

Europe

• Switzerland
• Belgium
• Germany
• France
• U.K.
• Italy
• Spain
• Sweden
• Netherland
• Turkey
• Rest of Europe

Asia-Pacific

• India
• Australia
• Philippines
• Singapore
• South Korea
• Japan
• China
• Malaysia
• Thailand
• Indonesia
• Rest Of APAC

Latin America

• Mexico
• Argentina
• Peru
• Colombia
• Brazil
• Rest of South America

Middle East and Africa

• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest Of MEA

Points Covered in the Report

• The points that are discussed within the report are the major market players that are involved in the market such as market players, raw material suppliers, equipment suppliers, end users, traders, distributors and etc.
• The complete profile of the companies is mentioned. And the capacity, production, price, revenue, cost, gross, gross margin, sales volume, sales revenue, consumption, growth rate, import, export, supply, future strategies, and the technological developments that they are making are also included within the report. This report analysed 12 years data history and forecast.
• The growth factors of the market are discussed in detail wherein the different end users of the market are explained in detail.
• Data and information by market player, by region, by type, by application and etc., and custom research can be added according to specific requirements.
• The report contains the SWOT analysis of the market. Finally, the report contains the conclusion part where the opinions of the industrial experts are included.

Key Reasons to Purchase

• To gain insightful analyses of the Neobanking market and have comprehensive understanding of the global market and its commercial landscape.
• Assess the production processes, major issues, and solutions to mitigate the development risk.
• To understand the most affecting driving and restraining forces in the market and its impact in the global market.
• Learn about the Neobanking market strategies that are being adopted by leading respective organizations.
• To understand the future outlook and prospects for the Neobanking market. Besides the standard structure reports, we also provide custom research according to specific requirements.

Research Scope of Neobanking Market

• Historic year: 2020-2023
• Base year: 2024
• Forecast: 2025 to 2034
• Representation of Market revenue in USD Billion

Neobanking Market Trends: Market key trends which include Increased Competition and Continuous Innovations Trends: