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Why big banks are losing market share with younger generations: A report finds fintechs and neobanks have captured 47% of all new checking accounts opened in 2023, and that Gen Zers increasingly see them as their primary accounts.

Where this leaves competitors: Some US banks are trying to build inroads in Latin America. To do so successfully, they'll need to:. Focus on offering personalized financial products that meet the evolving needs of tech-savvy users in Mexico and Brazil.

Neobanks, buy now, pay later providers, and incumbent banks should model on Intuit鈥檚 tool if it proves successful. Part of that success will depend on how Intuit addresses consumer data privacy concerns. Consumer and merchant adoption of genAI-powered chatbots will open new revenue doors for payment providers.

The FTC鈥檚 lawsuit against the neobank alleges that it misled and deceived consumers.

Canadian PFM fintech Hardbacon has closed its doors, and recently acquired US neobank PrizePool is turning off its consumer app. How we got here: This trend is ongoing, but reached an inflection point when Mint shut down its app, citing an inability to make enough money, per The Cut. Many factors are creating a challenging environment for these apps:.

Neobanks face their own set of challenges. The number of US neobank account holders will continue to climb by 46.4% between 2022 and 2026, according to our 鈥淣别辞产补苍办蝉 Confront Uncertainty鈥� report. But as VC dries up, neobanks will struggle to keep up with the incentives, low fees, and innovative products customers have come to expect.

Cash App beat out Citi, Bank of America, U.S. Bank, and other fintechs like Chime. However, Cash App fared far worse at attracting new accounts: Just 10.1% of consumers interested in a new account (out of 3,950 respondents) said they would consider using the fintech. Bank of America and Chase, by comparison, netted about 20%. What鈥檚 in a rating?

The neobank has big credit card aspirations as it looks to become a one-stop shop for financial services, but its new programs may struggle to secure uptake.

BofA is the second-largest bank in the US and has over 69 million personal and small business clients. In July, it reported that it had 23.4 billion digital interactions, an 11% YoY increase. Technology outages are becoming more common: BofA鈥檚 outage was the latest in a week that saw Verizon, Sony PlayStation, and Spotify all experience hours of unscheduled downtime.

At banks, insurance is back on the table: So-called 鈥渂ancassurance鈥� is becoming a thing again as neobanks bundle up and embed services for their customers鈥� convenience.

In 2023, 92.3% of the 5.2 million accounts opened digitally will be with incumbent banks, as digital-only banks fall victim to economic uncertainty and intense fintech competition.

Digital payment methods continue to displace cash and checks in the US payments ecosystem. But after a pandemic-driven crest, growth is moderating amid economic uncertainty, resetting the stakes for share of wallet.

Customers may have the most difficulty differentiating between neobanks and potentially fraudulent digital entities. Editor鈥檚 Note: A previous version of this article left NCUA out of the list of regulatory entities in the US and Canada that oversee credit unions and banks.

This represents 60.3% of millennial household spending and just under half of Gen X household spending, per the most recently available data from the US Bureau of Labor and Statistics. Gen Z鈥檚 spending power will only grow, as 42% are not yet adults, per the US Census Bureau. Gen Z is stepping up spending as other generations tighten their belts.

Big Tech, neobanks, and payments apps loom as stiff competition. Despite their tech savvy, Gen Zers find financial preparedness challenging. Gen Zers鈥� credit needs are evolving. Social media has changed how to reach Gen Z. How should banks meet the Gen Z challenge? Prioritize messaging through social media channels.

That鈥檚 according to consumer research firm Hearts & Wallets鈥� recent study of financial services brand awareness, which analyzed a database of over 75,000 US consumers for patterns and behaviors. By the numbers: According to the report, 69% of consumers recognize fintech brands, but just 59% are aware of newer offerings from traditional FIs.

This tactic reflects customers鈥� desire for stability and safety in the rocky year following last March鈥檚 US bank collapses.