AUSTIN, Texas–Noting the neobanking industry has grown immensely over the past decade, with numerous companies attaining considerable user adoption rates and attracting significant levels of venture capital, a new analysis is projecting such success is expected to continue.
Indeed, the forecast notes there are some estimates the neobanking market will reach a total transaction value of $2.6 trillion by 2027.
The new report, from SEON, probes neobanking adoption rates around the world, noting that according to some estimates almost half a billion people are using neobanking solutions in Brazil and India alone. Within Europe, Ireland leads in terms of overall adoption levels, with some 22% of the population using a neobanking service.
Some ‘Shortcomings’ Cited
“However, to ensure this positive performance can be maintained in the long-term, neobanking companies must do all they can to mitigate against the growing threats of online fraud and financial crime,” SEON said. “…While neobanks provide distinct advantages in terms of lower fees, faster onboarding, and more accessible services they also suffer from shortcomings that can make them as susceptible to fraud as traditional financial institutions.”
The company said those within the field must remain vigilant to the effects of online fraud and financial crime, which have the potential to cause monetary and reputational losses.
The Findings
Among the findings in the report, according to SEON:
- In terms of received capital, the three most successful neobanks are Robinhood, NuBank and SoFi.
- Around 43% of Brazil’s population is currently signed up to a neobank, which is the highest adoption rate in the world. In the next few years, rates of neobanking adoption are expected to grow fastest in the Philippines, the company said.
- Fraud rings, identity theft, money laundering and account takeover fraud remain a huge problem in the sector and could affect the long-term viability of sustained growth in the neobanking industry, SEON said.
The full report can be found here.
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