蘑菇AV

The news: Klarna will offer unlimited 5G data, talk, and text for $40/month with coverage on AT&T鈥檚 network in the US, per a press release, with plans to expand this deal to the UK and Germany soon. Our take: Klarna鈥檚 ambitions to be a BNPL provider, a mobile phone service, a neobank, and most recently鈥攁ccording to CEO Sebastian Siemiatkowski鈥斺�渁 digital financial assistant,鈥� per CNBC, signals the company鈥檚 voracious appetite to be everything at once.

Thrivent Financial for Lutherans recently converted its credit union to a digital-only bank after over a decade, aiming for greater growth and strategic flexibility beyond the limitations of its nonprofit credit union structure, as reported by American Banker. The rationale is to offer a wider range of products and reach younger consumers more effectively. This move addresses an existential threat to credit unions, whose customer base is aging. To succeed, Thrivent must implement a targeted marketing strategy to reach digital-first consumers on social media and ensure its new products meet the specific needs of younger demographics, focusing on relevant credit offerings.

Global fintech revenues increased by 21% YoY in 2024, a strong increase from 13% in the previous year, per Boston Consulting Group and QED Investor鈥檚 Global Fintech Report. Challenger banks such as Monzo, Nubank, and Resolut fueled impressive 23% revenue growth in the deposit vertical. Trading and investment fintech revenues grew 21%, and Insurance fintechs measured 40% growth. Fintechs need to drill down into key demographics like digital natives, the unbanked, and the underbanked. Scaled fintechs can also focus on merger and acquisition (M&A) opportunities.

The law enforcement agency is seeking civil penalties against the neobank, replacing the FTC鈥檚 original lawsuit.

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

This means traditional banks鈥� major differentiator of in-person service鈥攕omething digital-only banks can鈥檛 offer鈥攊s losing its power. Click here to view our full forecast for Canada traditional digital bank account openings. Digital-only banks will experience relatively more digital account growth over the next four years.

Fueled by high engagement鈥攅ven among low-income users鈥�neobanks like Nubank and Mercado Pago dominate the region鈥檚 fast-growing digital banking landscape. Latin American fintechs didn鈥檛 stumble into success鈥攖hey earned it by monetizing financial inclusion.

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.

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.

And many consumers鈥攊ncluding half of Gen Z鈥攂elieve digital-only banks are less secure than their traditional competitors. Now Openbank can focus on building its brand recognition and establishing trust with consumers who prefer in-person, human interaction.

Monzo Split also helps the neobank reach new customers when users share links among friends and family, building brand awareness and potentially attracting new customers. We forecast Monzo鈥檚 bank account holders will total 5.8 million this year, growing 7.6% YoY and accounting for 12.6% of all UK digital banking users.

Digital-only banks are also aligned with young consumers鈥� top financial priority of saving money, as they tend to offer higher savings rates than traditional FIs. Click to view our full forecast for US digital-only bank account openings. Consumers ages 65 and older offer the biggest growth runway for digital account opening.

Millennials are willing to switch banks: Even though most currently bank with large institutions, nearly half are open to switching to a credit union, online-only bank, or community bank鈥攊f their needs aren鈥檛 being met. Win millennials, win Gen Zers too: For millennials and Gen Z, digital banking and personalization aren鈥檛 just nice-to-haves鈥攖hey鈥檙e a must.

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.

Structure rewards and perks around high-value Gen Z spending categories (e.g., food delivery, subscriptions, and travel) to compete with fintechs and challenger banks. Introduce engaging, intuitive interfaces, savings challenges, and interactive budgeting tools that encourage financial literacy and responsible spending habits. And banks must continue to build trust with Gen Zers.

The valuations of Revolut and Varo Bank were slashed amid question marks over both 苍别辞产补苍办蝉鈥� bottom lines.