PUBLISHER: The Business Research Company | PRODUCT CODE: 1733573
PUBLISHER: The Business Research Company | PRODUCT CODE: 1733573
Neobanking refers to digital banking services that operate entirely online without traditional physical branch networks. These banks leverage technology to provide a seamless and efficient banking experience, catering to both individual consumers and businesses.
The neobanking market consists of sales, by entities (organizations, sole traders, or partnerships), of neobanking services that are primarily accessed through mobile apps and web-based platforms, where users can open accounts, conduct transactions and access financial services without visiting a physical bank. It is commonly used for both personal and business financial management, enabling users to monitor balances, make transfers and automate payments with ease.
The global neobanking market was valued at $30,378.83 million in 2019 which grew till 2024 at a compound annual growth rate (CAGR) of more than 42.00%.
Increasing Internet Penetration
The increasing internet penetration propelled the growth of the neobanking market in historic period. With more people gaining internet access, especially in emerging markets, neobanks have been able to reach a broader customer base without the need for physical branches. The rise of smartphones and affordable mobile data has enabled seamless digital banking experiences, allowing users to open accounts, transfer funds and access financial services anytime, anywhere. For instance, in October 2022, according to Data Reportal, a Singapore-based online reference library, a total of 5.07 billion people around the world used the internet, equivalent to 63.5% of the world's total population. Internet users continue to grow too, with the data indicating that the world's connected population grew by more than 170 million in the past 12 months. Additionally, according to the ITU (International Telecommunication Union), globally, the percentage of households with internet access increased from 54.7% in 2018 to 57% in 2019. About 4.5 billion people had access to the internet in 2019. Initiatives such as Internet.org by Facebook also contributed to the rise in internet penetration. Therefore, the increasing internet penetration drove the growth of the neobanking market.
Neobanks Revolutionize Lending With Open Network For Digital Commerce (ONDC)-Integrated Digital Loan Solutions
Major companies operating in the neobanking market are focusing on developing innovative solutions such as open network for digital commerce (ONDC)-integrated digital lending to enhance financial inclusion by providing a seamless, paperless loan solution through the ONDC framework. ONDC-integrated digital lending refers to a financial service model that leverages the Open Network for Digital Commerce (ONDC) framework to facilitate seamless and inclusive lending solutions for consumers and small businesses, enabling them to access loans and credit through various digital platforms interconnected within the ONDC ecosystem. For instance, in July 2024, Branch X, an India-based digital bank, launched ONDC Personal Loan, becoming the first neobank in India to introduce a lending solution through the Open Network for Digital Commerce (ONDC). The product leverages a digital-first approach, ensuring a completely paperless and transparent loan application and disbursement process. By integrating Voice AI-driven financial guidance and account aggregator technology, Branch X aims to empower underserved individuals, young professionals and small business owners with improved access to credit while fostering financial literacy.
The global neobanking market is fairly fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up to 17.04% of the total market in 2023.
Neobanking Global Market Opportunities And Strategies To 2034 from The Business Research Company provides the strategists; marketers and senior management with the critical information they need to assess the global neobanking market as it emerges from the COVID-19 shut down.
Where is the largest and fastest-growing market for neobanking? How does the market relate to the overall economy; demography and other similar markets? What forces will shape the market going forward? The neobanking market global report from The Business Research Company answers all these questions and many more.
The report covers market characteristics; size and growth; segmentation; regional and country breakdowns; competitive landscape; market shares; trends and strategies for this market. It traces the market's history and forecasts market growth by geography. It places the market within the context of the wider neobanking market; and compares it with other markets.