Investments: the growing opportunity for neobanks
Neobanks have successfully disrupted the finance sector by leveraging technology to improve the customer journey, so they can match the experience delivered by the latest generation of apps like Amazon and Uber. Research by the Financial Conduct Authority (FCA) shows that Starling and Monzo, despite only receiving authorisation in 2016 and 2017 respectively, have already built their share of the UK personal account market to 8%. This growth has been largely driven by digitally-savvy younger consumers attracted by their mobile offering.
The business model of several neobanks originally relied on basic banking products such as current and savings accounts, lending and money transfers. However, neobanks have expanded their ranges to include higher-margin offerings- for instance, Starling’s Personal Finance Marketplace gives customers access to insurance, mortgages and investments.
