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The growth of fintech funding Over the past several years, a significant amount of capital has flowed into so-called neobanks, digital financial companies that market and market banking services.
The whole idea behind the push made sense – many traditional banks are IRL-first and digital second, and their brick-and-mortar operations have resulted in costs being passed on to consumers. So why not build a new bank, a NeoA bank that uses technology to increase staff size, avoids buildings and bypasses Savings For customers instead?
With the regulation-ready systems of some existing banks, neobanks can spin up cheaply and start collecting revenue quickly – thanks to the power of variable payments – at little cost to customers. It was a great idea, to be honest, and like any idea, it attracted many founders and funders.
But after some fundraising and a few exits, sentiment seems to have turned on the model. How many neobanks can the market really support? Some of them are lost as well as Is there something good in their work to better segment the market and adjust their products?
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