A neobank (also known as an online bank, internet-only bank, virtual bank or digital bank) is a type of

direct bank A direct bank (sometimes called a branch-less bank or virtual bank) is a bank that offers its services only via the Internet, email, and other electronic means, often including telephone, online chat, and mobile check deposit. A direct bank has no ...

that operates exclusively online without traditional physical branch networks. The term "

challenger bank Challenger banks are small, recently created retail banks that compete directly with the longer-established banks in the UK, sometimes by specialising in areas underserved by the "big four" banks (Barclays, HSBC, Lloyds Banking Group, and Nat ...

" is used in the UK to refer to a number of

fintech Fintech, a portmanteau of "financial technology", refers to firms using new technology to compete with traditional financial methods in the delivery of financial services. Artificial intelligence, blockchain, cloud computing, and big data are r ...

banking startups that emerged in the wake of the 2007–2009 financial crisis. Their services may be accessed by clients through their respective computers or mobile devices. The range of services provided by neobanks is not as broad as that of their traditional counterparts. Unlike incumbent banks, a large portion of the income of neobanks is mainly made up of transaction fees received when customers pay with their debit card.

History

The term ''neobank'' has been in use since at least 2016 to describe fintech-based financial providers that were challenging traditional banks. There were two main types of company that provided services digitally: companies that applied for their own

banking license A banking licence is a legal prerequisite for a financial institution that wants to carry on a banking business. Under the laws of most jurisdictions, a business is not permitted to carry words like a ''bank'', ''insurance'', ''national'' in th ...

and companies in a relationship with a traditional bank to provide those financial services. The former were called challenger banks and the latter were called neobanks.

Notable neobanks

According to Dealroom.co the most notable neobanks in Europe are the below: #

Monzo Monzo Bank Ltd () is an neobank, online bank based in the United Kingdom. Monzo was one of the earliest of a number of new app-based challenger banks in the UK. Originally operating through a mobile app and a prepaid debit card, in April 2017 ...

# Chime #

N26 N26 (known as ''Number 26'' until July 2016) is a German neobank headquartered in Berlin, Germany. N26 was founded in 2013 in a Rocket Internet Incubator and currently operates in various member states of the Single Euro Payments Area (SEPA). I ...

Revolut Revolut is a British financial technology company that offers banking services, but did not have a UK banking licence. Headquartered in London, it was founded in 2015 by Nikolay Storonsky and Vlad Yatsenko. It offers accounts featuring currency ...

Starling Bank Starling Bank () is a British digital challenger bank which provides current and business accounts. Starling Bank is a licensed and regulated bank, founded by former Allied Irish Banks COO, Anne Boden, in January 2014. Since its founding, it ...

OakNorth Bank OakNorth Bank is a UK bank for small and medium-sized companies that provides business and property loans. The bank, which gained regulatory approval in early 2015, was founded by entrepreneurs Rishi Khosla and Joel Perlman, who had previously ...

Zopa Zopa is a British financial services company which offers deposit accounts and credit cards. It began as the world's first peer-to-peer lending company in 2005 and gained a full banking licence in 2020. The peer-to-peer side of its business cl ...

# Atom Bank # Qonto # Lunar # Wise #

Adyen Adyen is a Dutch payment company with status of an acquiring bank that allows businesses to accept e-commerce, mobile, and point-of-sale payments. It is listed on the stock exchange Euronext. Adyen offers merchants online services for merchan ...

# Tide #

Bunq bunq B.V. (colloquially named bunq — bank of The Free) is an international fintech company with a European banking license operating in 30 European countries. It was founded in Amsterdam where its headquarters are currently located. The comp ...

# Viva Wallet # Curve # Juni #

Monese Monese is a British-Estonian company that offers current accounts and money transfer services as an alternative to traditional banks. The mobile-only service provides accounts in Pounds sterling, Euros and Romanian leu, and is available in 31 coun ...

Tandem Tandem, or in tandem, is an arrangement in which a team of machines, animals or people are lined up one behind another, all facing in the same direction. The original use of the term in English was in ''tandem harness'', which is used for two ...

References

{{reflist Banking terms