US Neobanks Market Report 2022

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