Neobanks disrupt traditional banking: key players & facts

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Over the past years, neobanks have been making headlines by attracting big venture capital investments and disrupting the traditional banking system. Britain’s Monzo raised US$93 million in November 2017, building on a $27.5-million financing round during the first quarter. Earlier in the year, Atom Bank pulled in a total of $140 million, etc.


What are these Neobanks?


As we know, banking system nowadays is not perfect and people hate going to the physical office and doing paperwork on a regular basis, therefore more and more people switch to mobile only banks. However, there are many people, who are not sure about what are these neobanks.

Conversion Post EN

According to BBVA, there are two main groups of NeoBanks:

1). “There are the companies that have no banking licence and only offer the customer a relationship-side service, either using a traditional bank for processing transactions or in a partnership model. Such companies focus the value they can offer on a better user experience.

2). “The second model involves those who seek to become all-in, one-stop-shop banks from the outset, but without branch-based distribution channels and set up as mobile banks. Banks of this kind must obtain banking licences.

Probably you know, that neo-banking emerged about 5 years ago and first key players were Monzo and Atom Bank. And what they did was launching a digital bank that exists without any branches, reinventing the practices and processes associated with traditional banking.

And the main reasons why people start switching to Neobanks are: fast, simple, digital-first customer experience that eliminates the branch office entirely, low cost structure minimizing fees consumers notice and not willing to pay, budgeting and saving tools built into the account, which consumers can use to automate better financial habits.


Key Neobanks players to keep an eye on


1. Atom Bank
Instead of using street branches, they launched an entire bank in an app so you can manage your money whenever and wherever you want to. Voted KPMG’s Most Innovative Fintech in the UK and 8th on the planet, as well as being one of Marketing Week’s 100 Disruptive Brands, they’re out to change an industry that’s opaque, outdated and unsuited to the needs of modern customers.


2. Banco Original
Banco Original is 100% digital and allows users to open a current account directly online.


3. Bank Mobile
BankMobile makes managing your finances affordable, effortless, and financially empowering. They give totally fee-free banking experience.


4. BuddyBank
Buddybank is the new digital banking model powered by UniCredit. Exclusively designed for iPhone, buddybank offers a 24/7 messaging concierge service for banking and lifestyle needs. With buddybank you can open a bank account directly from your iPhone, get a Mastercard international debit card and request a Mastercard World Elite credit card. You can enjoy the Apple Pay experience and can even digitally control all of your physical card settings through the buddybank app.


5. Starling Bank
Starling Bank is a UK mobile-only bank offering personal, joint and business accounts. Their app helps people take the stress out of money by letting them visualise and manage their finances in real time. Their 100% mobile personal accounts include instant real-time payment notifications, insights into spending habits, in-app card lock, a flexible overdraft and 24/7 in-app customer service and the Starling Marketplace – which allows their customers to connect to an ecosystem of financial services and products, all in app, putting control over their entire financial life in the palm of their hand.


6. ImaginBank
ImaginBank is a Spanish mobile bank, spinoff of La Caixa bank. With this bank every operation you will make will go through your mobile.


7.  Lunar Way
Lunar Way believes that old ways won’t open new doors. This is why they want to change the traditional financial institutions and once and for all make your finances fair and manageable.
They think people deserve an alternate solution which fits their needs and requirements. Their dedicated team consists of multiple talents who are passionate about creating a much smarter, easier and more transparent way of handling finances.


8. Moven
At Moven, they want to change the way consumers think about their money. They are a neobank driving constant innovation.


9. N26
N26 is the mobile bank. N26 has redesigned banking to make it simple, fast and contemporary. Thanks to its fully digital business model, N26 operates on a much lower cost base with lean organisational structures, without IT legacies and without an expensive branch network. N26 passes on these cost benefits to its customers. N26 partners with the most innovative fintech and traditional financial companies to offer its customers best-in-class products such as TransferWise (foreign exchange), Raisin (savings), Clark and Allianz (insurance), auxmoney (credit) and others. Today N26 is one of the fastest growing banks in Europe and has more than 1 Million customers across 17 European markets and over 430 employees. N26 has raised more than $215 million from renowned investors including Allianz X, Tencent Holdings Limited, Li Ka-Shing’s Horizons Ventures, Peter Thiel’s Valar Ventures, members of the Zalando management board and Earlybird Venture Capital.


10. Qapital
Qapital is an app designed to help people achieve their unique financial goals. Combining behavioral economics and technology across Android and iOS allows Qapital to not only help people better understand their spending and saving habits but put their money towards things that make them truly happy.


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