Neobanking is skyrocketing! Both in developed and developing countries, one cannot help noticing the ascendance of the so-called ‘challenger banks’ (aka ‘neobanks’, ‘online banks’, ‘Internet only banks’, you name it). This new class of financial service providers can be defined as thoroughly digitized institutions running now offices and physical branches. Their successful expansion clearly indicates that countless clients really need this type of finance.

Financial results of neobanking sector

Today, we will discuss the most far-reaching trends in this domain more specifically, with a special focus on developing nations. It is also our intention to talk about the role crypto assets might play in this industry, and the advantages generated by the Everchain White Label Wallet. 

A year ago, the size of the neobanking sector was valued at $47.39 billion. By the end of this year, it is projected to hit $66.82 billion. Over a long-term horizon, it is expected to be valued at $2,048.53 billion in 2030. At least, this is what Statista’s figures say. If we look deeper, we will also see some upward trends:

  • The total value of transactions made by neobanks is expected to rise from $2.52 trillion in 2021 to $3.84 tillion in 2022 and 8.61 in 2026
  • Consequently, the average transaction value per user is also increasing, from $17.33 thousand to $18.43 thousand and $24.79 thousand in 2026

What makes this growth possible? The answer is simple. For end-clients, this option is both more convenient and cheaper than traditional finance giants. Correspondingly, their demand for neobanking services is growing. Simultaneously, it is getting easier and easier to satisfy this demand.

Due to recent advances in technology – e.g. almost universal Internet coverage, reliable and affordable IT infrastructures, and availability of cheap smartphones, tables, and laptops – it is now possible for neobanks to save costs previously spent on offices and staff.

In addition, it is not too expensive to order a compliant, secure, and feature rich mobile applications and mobile-friendly websites.

As an outcome, as DataM Intelligence stresses, neobanks can offer:

  • Fast services available on the go, literally
  • Advanced banking functionalities and features
  • Healthier interest rates, lower fees, and more cost-effective banking in general

As for the typical functions, they include:

  • Money transfers, including peer-to-peer transfers
  • Mobile payment processing
  • E-wallet services
  • To a limited extent, loans, credit cards, and BNPL products
  • Account management, micro-investments, and insurance
  • Educational tools and tracking functionalities

While the current ‘center of gravity’ of neobanking is spread across the US, the UK, Russia, France, and Brazil, there is a great potential of neobanking in developing nations of Africa and Asia.

Advantage of Neobanking for Developing Countries and Similarities with Crypto 

Why are the prospects of neobanking so promising in developing countries? There are three primary reasons for that. First, many people are there unbaked, so there is much space for growth:

Second, there are many small businesses in developing countries, roughly 300 million SMEs. All these small companies need access to affordable and effective banking.

Third, many of these businesses need cross-border payments.

In this respect, it is interesting how many similarities there are between neobanking and crypto. After all, it offers all the opportunities offered by challenger banks, some of which are already absorbing the potential of crypto.

If you run such a bank in a developing country, we offer you to try our Everchain White Label Wallet, that offer such capabilities as:

  • Receiving and sending crypto
  • Buying and exchanging crypto
  • Integration of Visa and MasterCard for fiat payments
  • And much more

Contact us to explore these opportunities!