蘑菇AV

UK-based neobanks Monzo and Revolut give banks examples to follow. Both offer a free tier and several paid ones with clear price points. Instead of being product-focused, these tiers offer an array of features that aim to simplify customers鈥� financial management, such as account aggregation and custom spending categories. Giving customers more flexibility and control ultimately benefits banks.

With their respective commerce media network announcements in spring 2024, Chase and PayPal joined buy now, pay later (BNPL) fintech Klarna and neobank Revolut in the burgeoning world of FMNs. Financial services companies boast their cross-merchant, holistic view of consumer spending behavior as a key differentiator to advertisers.

Our third annual study reveals which account opening features US consumers value most, based on our exclusive survey.鈥�

Neobanks and banking-adjacent apps are crowding out general-purpose prepaid cards. Players like Cash App are attracting consumers who had previously relied on prepaid cards to make non-cash purchases and pay bills. 蘑菇AV 23 million US adults use digital-only banks, per our forecast.

The reception: Internally, the bank reports a fourfold increase in customer engagement compared to US digital-only banks, based on per-client deposits and product subscriptions. That鈥檚 likely because Berkshire鈥檚 perks are successfully incentivizing both. Key takeaways: Berkshire鈥檚 marketing strategy has incorporated some unique perks that could be attractive to its  target market鈥擥en Zers.

Championed by neobanks including Revolut and Current, this format offers banking products like debit cards and savings accounts. Teen accounts are linked to parents鈥� accounts, giving them oversight and control of their teen鈥檚 spending. This maintains guardrails while giving teens some independence. Teen banking rolled into existing apps.

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.

Despite the popularity of tech-forward neobanks in the UK, customers lag in their adoption of AI bank chatbots. Widespread reliance on phone service and regulators鈥� worries about security vulnerabilities have inhibited uptake. By the end of 2026, 27.6% of UK adults will use bank chatbots.

Digital-only banks or those that have closed many locations should consider covering customers鈥� ATM fees, at least up to a certain threshold.

The neobank claimed that Meta was falling 鈥渨oefully short鈥� in addressing social media scams. Banks argue that if tech companies like Meta were more proactive in sharing fraud-related intelligence with FIs, they could help identify and prevent scams more effectively.

In recent years, neobanks Monzo, Revolut, and Starling have acquired about 20 million customers combined, per Fintech Futures. But traditional banks Nationwide, Barclays, and Lloyds also gained customers that switched accounts. The rollout disclaimer: UK industry observers believe the launch of open banking isn鈥檛 what it could have been.

The share of Gen Z digital-only bank account holders will grow 29.5% compounded annually from 2023 through 2026, which means neobanks have a real chance to win out. Digital gaming is also knocking. Gamers will tap into digital wallets and transactions in games like Roblox and Minecraft. But digital doesn鈥檛 mean financially literate.

The experience and brand presence that Wall Street lenders are able to offer savers is a major competitive advantage over neobanks and fintechs, especially after recent regional bank failures. The speed and ease with which consumers can open accounts is crucial.

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:.

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.

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.

Trend 3: Neobanks are nearing the end of their runway. Digital challengers faced a lack of funding in 2022 as investors favored profitability over growth. For most neobanks, profits remained elusive and the economic climate grew increasingly harsh. In the coming year, neobanks will need to turn to new sources of revenue, like lending and credit cards, to flirt with profitability.

Some neobanks have achieved profitability, but many are still going through fundraising rounds. But the venture capital for these new fintechs dropped 42% in 2024, per The Financial Brand. This would be a good time for FIs to launch highly targeted digital products for Gen Zers and win a larger share of new customers.

Many will favor digital-only accounts: We expect Gen Z digital-only bank account holders to almost triple between 2020 and 2023鈥攁nd their total will more than double to 10.0 million between now and 2026. Focusing on digital commerce can help debit providers boost Gen Z's debit usage. Debit is capturing over one-third of online purchase volume as customers embrace the tech online.