The neobank, or digital bank, the phenomenon continues to take the world by storm, with global winners, from Brazilian Nubank worth $ 10 billion and Berlin's N26 worth $ 3.5 billion, to Chime, now valued at $ 14.5 billion as the most valuable consumer fintech in the United States.
Neobanks spearheaded the $ 3.6 billion charge in venture capital financing for consumer fintech startups this year. And as the acceleration of coronavirus-fueled digital transformation continues, it appears the digital bank is here to stay, with some estimates indicating that neobanks will reach 60 million customers in North America and Europe by the end of 2020 and surpass 145 million. by 2024.
The space is also becoming more crowded, a trend that will only accelerate with fintech devouring the world and creating greater infrastructure that will allow any business to include a bank account as an extension of the product.
Consequently, neobanks are not a monolithic model and not all are created equal. Looking under the hood of business models around the world reveals significant operational differences and highlights specific characteristics that are more likely to be successful over the long term.
Five global models of neobank
Today, there are five distinct models that are driving globally:
Guided by the exchange: It is based on payment receipts, obtained through interchange as a revenue engine. Whenever a customer uses the neobank card as a payment method, they get paid [e.g. Chime / US; Neon (hybrid of 1 & 2) / Brazil].
Credit Driven: Leverage a credit-based model, starting with a credit card or similar offer and then providing a bank account [e.g. Nubank, Neon (hybrid of 1 & 2) / Brazil].
Source link