This report provides comprehensive and current information and analysis of the neobanks market including neobanks market size, anticipated market forecast, relevant market segmentation, and industry trends for the neobanks market in the US.
Current market landscape
A neobank is a financial institution that has only been in operation for a short time and offers banking services exclusively online. Examples of popular neobanks include Chime, SoFi, Revolut, Current and Varo.
For most of these neobanks, their value propositions center on a fee-free banking experience, competitive rates, an intuitive mobile app, as well as customer-centric offerings such as money management tools and early paycheck access. As such, neobanks have been able to capture the affinity of many, with nearly 85% of neobank customers saying that they are satisfied with their providers. For neobanks, there is still room to capture non-adopters, with nearly 40% of consumers willing to open an account with a neobank. For these consumers, better prices, rewards/incentives, as well as a user-friendly mobile app are the main motivators that would push them into opening an account with a neobank. The types of accounts consumers are willing to open with a neobank are mainly the entry-level products, with over 50% interested in getting a checking or savings account with a neobank, while nearly half would be interested in a credit card offering as well.
Market share and key industry trends
- The majority of consumers solely bank with a traditional bank, while 21% of consumers use both a traditional bank and a neobank.
- Price and incentives are the two main motivators that would get consumers to open an account with a neobank, while 44% are outright not interested in using a neobank.
- Interest is high among all generations, with 69% of Gen Zs interested in getting a checking account from a neobank, while 58% of Boomers are interested in savings accounts.
Future market trends in neobanks
While neobanks have been able to capture market share from traditional players, one of the biggest challenges facing this sector is the lack of trust and brand awareness that neobanks have compared to traditional FIs, with 46% of consumers saying that they would not open a neobank account due to them not trusting that their money will be safe. A further 62% of consumers are also more trusting of traditional banks than neobanks when it comes to the safety of their personal data. As more players continue expanding their financial services footprint (eg Apple), many neobanks will have an even more difficult road ahead given the higher trust levels consumers have in these incumbents. Neobanks have shown that they are able to compete on price; in order to sustain the loyalty of their customers, they must find ways to cater to the growing financial needs of their customers, as well as seek diverse revenue streams to ensure their long-term survivability amid a heated market.
Read on to discover more about the neobanks consumer market, read our Switching in Financial Services – US – 2022 report, or take a look at our other Financial Services research reports.
Quickly understand
- Neobank adoption and satisfaction.
- Motivators for using a neobank.
- What would push non-adopters into using a neobank.
- Products consumers are interested in opening with a neobank.
- Attitudes toward neobanks.
Covered in this neobank market report
Brands include: Current, Chime, SoFi, Upgrade, Facebook, Monzo, Bank of America, Citibank, Discover, Chase, Ally.
Expert analysis from a specialist in the field
This report, written by Amr Hamdi, a leading analyst in the Finance sector, delivers in-depth commentary and analysis to neobank market strategy, to highlight current trends and add expert context to the numbers.
Neobanks have a tough road to navigate going into next year. Recessionary fears only loom larger, which will have adverse effects on the profitability and survivability of many neobanks. Growing competitive threats from industry behemoths such as Apple and Amazon continue to loom as well, as these incumbents continue to grow their financial services footprint and seek to steal market share. While neobanks have shown that they can compete with traditional FIs at their game, the winners in this space will ultimately be the ones that look to diversify their product offerings in order to remain agile and aligned with their young customers’ evolving financial needs.
Amr Hamdi
Finance Analyst
Collapse All
-
Overview
- What you need to know
- This Report looks at the following areas
- Market context
- What you need to know
-
Executive Summary
-
- Top takeaways
- Usage of both traditional and neobanks is split among financially healthy and struggling consumers
- Figure 1: Traditional bank vs neobank adoption, by financial situation, 2022
-
- Figure 2: Chime Checking Account fees vs traditional banks, 2022
- The types of accounts consumers would open with a neobank differ by generation
- Figure 3: SoFi credit card email, 2022
-
- Figure 4: Accounts consumers would open with a neobank, by generation, 2022
- Older generations are less interested in using a neobank but there is still opportunity to capture share among Gen Xers
- Figure 5: Interest in opening an account with a neobank, by generation, 2022
-
- Figure 6: Varo savings APY, 2022
- Market overview
- Figure 7: Neobanks outlook, 2022-27
- Opportunities and challenges
- Competitive threats will only loom larger for neobanks
- Figure 8: SoFi life insurance, 2022
- Reaping higher trust and loyalty through a community-focused approach
- Figure 9: Majority website, 2022
- Figure 10: Daylight website, 2022
- Key consumer insights
- 66% of consumers only bank with a traditional FI; Millennials most likely to use a combination of both a traditional and neobank
- Figure 11: Traditional bank vs neobank adoptions, by generation, 2022
- Traditional banks and neobanks match closely on satisfaction
- Figure 12: Satisfaction with traditional banks and neobanks, 2022
-
-
Understanding Neobanks
- What is a neobank?
- Figure 13: Chime partner bank, 2022
- How do neobanks offer fee-free products?
- Figure 14: Current paid Facebook ad, 2022
- How do neobanks provide customer service?
- How do neobanks make money?
- Figure 15: Traditional bank vs neobank, 2022
- What is a neobank?
-
Market Factors
- Current economic outlook spells trouble for many neobanks
- Chime, among other neobanks, announces layoffs amid many cost-cutting measures
- Current economic outlook spells trouble for many neobanks
-
Competitive Strategies and Market Opportunities
- Upgrade launches new high-yield savings account boasting one of the highest APY rates in the industry
- Figure 16: Upgrade Premier Savings account, 2022
- SoFi ramps up personal loan messaging
- Figure 17: SoFi personal loan paid Facebook ad, 2022
- Chime continued to promote its secured credit card, highlighting the lack of fees and interest
- Figure 18: Chime Credit Builder paid Facebook ad, 2022
- Subscription bundles present a way for neobanks to diversify their revenue sources
- Figure 19: Monzo premium account, 2022
- Upgrade launches new high-yield savings account boasting one of the highest APY rates in the industry
-
The Neobank Consumer – Fast Facts
-
-
Reasons for Opening Neobank Account
- A convenient mobile app and affordability are the two main neobank selling points
- Figure 20: Reasons for opening a neobank account, 2022
- Older consumers more likely to bank with a neobank due to better prices, while younger are more swayed by the mobile experience
- Figure 21: Reasons for opening a neobank account, by age, 2022
- A convenient mobile app and affordability are the two main neobank selling points
-
Motivators to Using a Neobank
- Price and incentives the two main motivators to getting consumers to open a neobank account
- Figure 22: SoFi credit monitoring reward, 2022
- Figure 23: Motivators that would get consumers to open a neobank account, 2022
- Price and incentives the two main motivators to getting consumers to open a neobank account
-
Interest in Financial Accounts with Neobanks
- Savings and checking accounts are the two products consumers are most willing to open with a neobank
- Figure 24: Types of accounts consumers would open with a neobank, 2022
- Savings and checking accounts are the two products consumers are most willing to open with a neobank
-
Most Valuable Banking Features
- Direct deposit, fee-free overdraft protection are the two most valuable banking features
- Figure 25: Most valuable banking features, 2022
- Multiculturals place a higher importance on fee-free overdraft protection
- Figure 26: Importance of fee-free overdraft protection, by race and ethnicity, 2022
- Direct deposit, fee-free overdraft protection are the two most valuable banking features
-
Attitudes toward Neobanks
- Trust in traditional banks trumps that of neobanks
- Figure 27: Trust in traditional banks vs neobanks, by generation, 2022
- Seven in 10 consumers are more engaged with their finances after using a neobank
- Figure 28: Engagement with finances due to using a neobank, by age, 2022
- 73% of consumers predict lifelong relationships with their neobank
- Figure 29: Loyalty toward traditional banks and neobanks, by age, 2022
- Trust in traditional banks trumps that of neobanks
-
Appendix – Data Sources and Abbreviations
- Data sources
- Consumer survey data
- Marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
- Data sources
Mintel: Market Intelligence Made Easier
The first Mintel Market Intelligence report was published over 50 years ago. Since then, we have provided our unique insights and understanding of consumers, innovation and global markets to thousands of customers worldwide. Here’s why our customers rely on Mintel:
- Gain a comprehensive, 360-degree view of the market: Mintel reports blend consumer research, market forecasts, product innovation tracking, and competitive analysis, allowing businesses to see every angle of their industry and identify new opportunities quickly.
- Make decisions with confidence, grounded in robust data: Each report draws on up-to-date, reliable information from trusted sources and industry experts, ensuring your strategies are based on solid evidence rather than speculation.
- Benefit from expert analysis and practical recommendations: Mintel’s reports are written by experienced analysts who interpret complex data and provide clear, actionable insights you can trust to guide your next moves.
- Stay ahead with actionable intelligence on market trends and consumer behaviour: By combining fresh research with long-term market monitoring, our reports help businesses anticipate changes and adapt strategically. So you’re prepared to make informed decisions and drive growth.
What goes into a Mintel Market Intelligence Report?
Curious about how a Market Intelligence report comes together? We like to think of it as building a detailed puzzle. We start with individual pieces: data from consumers, market statistics, industry trends, and online conversations. Then our expert analysts add world-class human insight and industry knowledge. The pieces are assembled to reveal a clear, comprehensive picture of a market.
The Four Pillars of Our Research
We use a combination of four main research methods when creating our reports, each adding a valuable perspective:
- Consumer Research: Direct surveys with real people, giving us clear, current insights into what people think and do.
- Desk Research: In-depth review of trusted data sources. We use this rich database, plus powerful internal tools that track new products and market sizes, to detect trends and guide forecasts.
- Trade Research: Insights from conversations with industry experts. Their real-world experience helps us understand what’s happening behind the scenes.
- Brand and Social Media Research: Analysis of online opinions and trends. This lets us spot trends, measure brand sentiment, and capture feedback in real time, adding further depth to our research.
For further information about our research and analysis methods, visit our helpdesk.
Bringing It All Together
Each of these four pillars provides a different piece of the puzzle. Consumer research tells us what customers think, desk research provides the factual framework, trade research offers an insider’s view, and social media analysis reveals public sentiment.
Our expert analysts are skilled in weaving these diverse data streams together. They apply a range of quantitative and qualitative analysis techniques to uncover the deeper story, connecting the dots to deliver clear, actionable insights. This comprehensive, multi-layered process is how we transform raw data into a market intelligence report you can trust to inform your most important business decisions.
For a closer look at a Mintel Market Intelligence Report, browse trhough the sample PDF report below:
Please Note: All of the figures, graphs, and tables in this sample report have been redacted.
£ 3,695 (Excl.Tax)
-
Download today with instant access
Pay via credit card or purchase order
-
Multiple formats provided
We send a PDF, Powerpoint and Excel Databook straight to your inbox. An interactive version of the report is also available on our online platform
-
Interactive databook included
Focus on the data that matters most to you with a customisable databook avaliable on our platform
-
Save up to 20% when you purchase multiple reports
Discount is applied directly at checkout
Next Starts Here
Whatever your business needs, we have the solution. From market intelligence reports to customised growth strategies.
Learn moreTrusted by global industry leaders
Working in a customer-obsessed organization means that data and insights have to be at our fingertips. Mintel’s reports help us support anecdotes with real quantifiable insights. The summary sections (which I really like) helps save time by giving a birds eye view of the content before spending time combing through the pages.
Our business review discussions are strengthened by the relevancy of the reports to help us better understand our customers. In addition, the customer service received from the team (especially in crunch periods) makes the process of understanding customer behavior even better.
Ngozi Ngonadi-Nkwoji, Senior Marketing Manager, Amazon
When I’m investigating specific sectors I tend to use Mintel reports for their forecasting, which I’ve always found to be very accurate.
They also offer really broad and deep coverage in their reports. They are very, very detailed. For example, we were able to gain insight across a wide range of business areas from just one report, proving that Mintel is excellent value for money.
So overall, it’s the level of detail and the quality of forecasting that really stand out for me.
Rebecca Green, Market Insight Manager, Wincanton
Mintel is really good for getting a handle on a particular category quickly. If we are working on a new business pitch in an area we don’t have much experience in, it’s a brilliant way to get up to speed with what’s going on, what’s changing and what the key trends are in any category.
It’s very rare now that anyone will plough through a 200-page report – that’s why the summaries are really useful. We know they are backed up by a lot of detail, so if you need to go into something in more depth you know the information will be all there for you.
Pauline Robson, Managing Partner, Mediacom
We utilize Mintel Reports, Trends and Comperemedia to mine for insights across the numerous business verticals that Epsilon serves, such as CPG, automotive, telecom, healthcare/pharma, retail and financial services.
By integrating Mintel insight into new business opportunities, we have been able to gain the competitive edge necessary to advance partnerships with global brands and key business players.
For our organization, it’s about depth and breadth. Having one without the other doesn’t enable success in our business.
Virginia Harvey, Secondary Research Manager, Epsilon
There is no question that Mintel is the go-to resource for the best quality market research, but I did not think it was an affordable option for Abacus Marketing to consider. As a small marketing agency, we only work with a few new clients each year.
However, we have a very high-end consultative approach to our work, so we really do need a partner like Mintel to provide the big agency experience we are always aiming to deliver. Our clients come from an incredibly diverse range of industry sectors, so we obviously need access to market research reports from a very wide spectrum of marketplaces – and that is precisely what we got.
Stephen Taylor-Brown, Managing Director, Abacus
Next Starts Here
Whatever your business needs, we have the solution. From market intelligence reports to customised growth strategies.
Learn more
