The established banking system, on the other hand, relies on physical branches to open accounts, carry out transfers and handle customer queries, which is very restrictive for some customer groups. In addition, low and transparent fees allow customers to reap the benefits of financial services. What creates the demand for digital banks?ĭigital banks offer unparalleled convenience and transparency to their users: via their smartphones, customers can open an account whenever and wherever they want. ![]() For instance, Goldman Sachs has launched Marcus, and RBS has launched its standalone version called Bó to compete with the “newcomers”. Revolut, Fidor, Simple, N26, and Monzo are some of the well-known neobanks, the alternatives to which incumbent banks are trying to develop. The largely undisturbed retail banking business, which has enjoyed excessive profits and left many customers dissatisfied and unserved, is now threatened by neobanks. The neobanking market is expected to grow to $394 billion in value by 2026, at a CAGR of 46.5% in the coming years, driven by underserved market segments such as non-bank customers, SMEs, freelancers, startups, and credit entrants.
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