Neobanks are growing rapidly and disrupting primary banking relationships
Simon-Kucher, the world’s leading commercial growth and pricing consultancy, released Neobanking Beyond Disruption, a new report analyzing how digital-first banks are competing, scaling, and reshaping retail banking across global markets.
Internationally, neobanks have added approximately 300 million customers over the last two years, positioning them among the fastest-growing banks in the world. These challenger banks are expanding revenues and customers at a pace incumbent institutions struggle to match.
“Neobanks are no longer a niche option for tech-savvy early adopters,” said Christoph Stegmeier, Senior Partner in the Financial Services practice at Simon-Kucher. “They now compete head-to-head with incumbents on customer acquisition, satisfaction, engagement, and relevance.”
The study identifies six trends shaping neobanking:
- Neobanks are eroding the single-bank model as 72% of consumers maintain relationships with two or more providers.
- The 18-29 cohort are the fastest adopters, but early career professionals between 30-39 reflect growing engagement and product adoption.
- Consumers are turning to neobanks for newer, higher engagement categories such as crypto and investing.
- Neobanks are outperforming traditional banks in overall customer satisfaction with 52% of customers satisfied with their primary neobank compared to 40% for large and national banks.
- Regional banks are losing relevance among new clients and lagging in customer satisfaction and primary-bank considerations.
- Consumers are switching to neobanks for incentives, primarily higher savings rates, greater cashback rewards, and fee-free checking.
Despite their rapid growth, neobanks still trail traditional banks in trust, perceived security, and breadth of services. While digital-first banks have gained market share in users, they only account for 5% of global retail banking revenues. In the US, profitability remains challenging as neobanks generate on average only $70 to $80 in annual revenue per customer.
Download the full report here.
