The global neobank market is estimated to grow from $20.4bn in 2019 to reach $471bn by 2027, according to a ResearchAndMarkets.com’ report.
That would mean an estimated compound annual growth rate of 48.1%.
The growth is said to be driven by increasing governmental and regulatory support towards the sector as well as higher interest rates offered to customers over that offered by traditional banks.
The report also highlights that many customers will be swayed by neobanks’ faster and more personalised services.
The loan segment was predicted to keep its dominating position as the major service provided by the businesses in this sector. The payment and money transfer segment was also expected to grow significantly over the next seven years.
Europe is expected to keep its position as a leader in the industry, but the neobanks in the Asia-Pacific are also believed to grow considerably in the years to come.
The news comes as three of the leading UK challenger banks – Revolut, Monzo and Starling Bank – reported massive losses in the year gone by, casting considerable doubt among some experts about these ventures’ future.
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