Simon-Kucher study spotlights the rise neobanks around the world
Neobanking has moved well beyond its initial status as an alternative for tech-savvy users to become a major global movement. Digital-first banks now serve more than 1.4 billion accounts around the world, according to a study from Simon-Kucher, which found 2 in 5 consumers expect a neobank to become their primary bank within the next three years.
This niche category in the financial world is not so niche any more: neobanks are expanding at a yearly rate of roughly 13% as they transform how people interact with their money. They are easier and more convenient than normal banks with fewer obstacles to entry, meaning huge numbers of previously unbanked individuals are now participating in digital payments and saving.
There is currently a lot of competition between neobanks and traditional banks when it comes to attracting new customers. And while digital-first players now hold 19% of all banking accounts, they only generate about 5% of global banking revenues. This shows that while they are gaining users quickly, turning that scale into profit is easier said than done.
Success in this category is becoming more concentrated among a few top players. For example, Nubank and Revolut alone added more than 50 million users over a period of 24 months. Across the industry, more than 20 digital institutions have grown to serve more than 10 million customers, while roughly 100 have passed the one million user milestone.
Digital-first banking around the world
The growth in digital banking has varied significantly in different regions. Latin America is currently the leader in this space, with the number of digital accounts in Brazil now matching the total adult population. Overall, Brazil is well acquainted with low-barrier, digital payments: The free-to-use digital payments app Pix, run by the Central Bank of Brazil, is used by over 70% of the population.
Colombia and Mexico also have large numbers of consumers using neobanks. Though somewhat late to the party, growth in Mexico has been fueled by local providers like Stori and international providers like Mercado Pago, making it one of the fastest-growing markets in the world.
In Europe, the United Kingdom remains a frontrunner with more than 30 million accounts. In contrast to that, the market in North America is more divided, and no single challenger there has yet entered the top global tier.
As for Africa, many consumers skip banks altogether, opting instead for mobile money operators, though neobanks like TymeBank and OPay, which ultimately offer consumers comparable services, are growing quickly. Meanwhile in Asia, the market is highly fractured between China, Korea, and Southeast Asia, all of which have their own digital banking ecosystems.
Overall, consumer habits are changing as people move away from using only one bank. About 72% of consumers now have accounts with two or more providers. Turkey leads this trend with an average of more than two banking relationships for every customer.
While younger users were the first to get on board with digital banking, growth is now being driven heavily by professionals in their thirties who use neobanks for investments and wealth management.
Consumers satisfied, but profitability elusive
Digital banks are clearly winning on customer satisfaction, with 52% of users reporting they are satisfied with their primary digital bank compared to 40% for traditional national banks. These high ratings are often due to low fees, easy account opening, and a better digital experience.
Despite that, traditional banks still hold an advantage in areas like brand trust, security, and the availability of services offered. Another area where neobanks have lagged behind is loans: Most traditional banks offer mortgages, personal loans, or even insurance, while neobanks have not been able to match these offerings, instead offering less useful features like cryptocurrency trading or buying and selling stock shares.
In this way, digital banks have carved out a somewhat separate niche, which does not perfectly overlap with traditional banks. Indeed, this may be key to understanding why so many consumers have more than one bank account.
To continue scaling, successful digital banks are adopting new methods such as gamification to keep users engaged and subscription-based pricing to stabilize their income. Integrating AI is also becoming essential. By using AI to automate how they manage customer relationships, these banks can offer personalized service at a scale that traditional bank models often struggle to match.
As the industry matures, the focus for these companies is shifting from simply finding new customers to finding sustainable ways to remain profitable. Despite the growing pains involved in finding ways to stay competitive and profitable, neobanks have done remarkably well: Simon-Kucher revealed that revenue per customer has increased by around 30% from 2021 to 2025.
Indeed, traditional banks, which have largely rushed to adopt the digital offerings that consumers increasingly demand, have a lot to learn from the success of neobanks. That success has now gone far beyond just entry timing or product novelty.
“As the industry matures, performance increasingly depends on how banks operate at scale, rather than simply what they offer,” said Christoph Stegmeier, senior partner at Simon-Kucher.
“Importantly, the shift towards digital banking is not inevitable or uniform. While incumbents will not be able to replicate the entire DNA of a neobank, they are able to adopt some of the underlying operating principles that allow leading neobanks to scale faster, engage customers more deeply, and monetize more effectively.”
