Europe Neobanking Market to Grow with a CAGR of 21.05% through 2030F

The Europe Neobanking market is growing due to increasing demand for digital financial services, changing consumer preferences for mobile-first banking, regulatory support, and the rise of fintech innovation across the region.

According to TechSci Research report, “Europe Neobanking Market – By Country, Competition, Forecast & Opportunities, 2020-2030F”, the Neobanking Market was valued at USD 28.14 Billion in 2024 and is expected to reach USD 88.25 Billion by 2030 with a CAGR of 21.05% during the forecast period. The Europe neobanking market has experienced rapid growth in recent years, driven by a combination of changing consumer behavior, technological advancements, and supportive regulatory frameworks. Neobanks, digital-only financial institutions that operate without physical branches, are increasingly becoming a preferred choice for consumers seeking convenient, cost-effective, and innovative banking solutions. These banks offer a range of services, including payments, savings accounts, loans, and investment products, primarily through mobile apps or online platforms. The rise of neobanks is largely attributed to the growing demand for seamless, on-demand financial services that align with the digital lifestyles of today’s consumers. As more individuals and businesses embrace mobile-first banking experiences, the market for neobanks continues to expand, reshaping the financial landscape across Europe.

Consumers are moving away from traditional banking methods, favoring online and mobile banking platforms that provide instant access to financial services. The proliferation of smartphones, improved internet connectivity, and increasing adoption of e-commerce have all played a significant role in driving the shift toward digital banking. Younger generations, particularly millennials and Gen Z, who are accustomed to technology and digital interfaces, are leading this change. They prioritize convenience, low fees, and the ability to access their accounts anytime, anywhere, all of which are provided by neobanks. Moreover, the COVID-19 pandemic accelerated this shift, as lockdowns and social distancing measures forced consumers to rely more on digital banking services and online payment systems.

The regulatory environment in Europe has also played a crucial role in fostering the growth of neobanks. The introduction of the Revised Payment Services Directive (PSD2) in the European Union has created a more competitive and open banking environment, encouraging innovation and allowing fintech companies to enter the market more easily. PSD2 mandates that banks share customer data with third-party providers, provided customer consent is given, which has paved the way for the development of open banking and the rise of neobanks. Additionally, the General Data Protection Regulation (GDPR) has strengthened consumer data privacy and protection, which has increased trust in digital banking platforms. These regulatory changes not only help neobanks gain customer confidence but also foster a competitive environment where both new and traditional financial players must innovate to stay ahead.

The ability to offer cost-effective banking services is another key factor driving the growth of neobanks in Europe. Traditional banks often have high operational costs due to their physical branches, legacy systems, and paper-based processes. In contrast, neobanks operate digitally, allowing them to eliminate the overhead costs associated with maintaining branch networks and administrative staff. As a result, they can pass on these savings to customers in the form of lower fees, better interest rates, and more flexible services. For example, many neobanks offer fee-free accounts, competitive foreign exchange rates, and real-time financial insights. Neobanks also tend to focus on transparency, offering no hidden fees or complicated pricing structures, which appeals to customers who are frustrated with traditional banks' often opaque pricing models.

The increasing demand for digital financial services, coupled with favorable regulatory frameworks and technological advancements, is expected to drive continued growth in the sector. Neobanks are well-positioned to capitalize on the growing trend of financial digitalization, offering innovative solutions that meet the evolving needs of consumers. As competition intensifies, neobanks will need to focus on further improving their customer experience, expanding their product offerings, and investing in security and compliance to stay competitive. Additionally, the rise of open banking and the increasing adoption of artificial intelligence (AI), machine learning, and blockchain technologies will provide new opportunities for neobanks to innovate and differentiate themselves in the market.

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The Europe Neobanking Market is segmented into account type, services, country and company.

Based on account, the savings account segment is the fastest-growing in the Europe neobanking market, driven by increasing consumer demand for low-cost, accessible, and digital-first banking solutions. Neobanks offer competitive interest rates, zero or low fees, and ease of access through mobile apps, making savings accounts highly appealing to tech-savvy consumers. The ability to track savings in real-time, set goals, and automate deposits provides customers with an efficient and convenient way to manage their finances. Additionally, as more consumers seek alternatives to traditional banks that often come with higher fees, neobanks are gaining market share by offering transparent and user-friendly savings account options. This trend is expected to continue as neobanks expand their offerings and attract a wider customer base.

Based on country, the United Kingdom is the fastest-growing country in the Europe neobanking market, fueled by a highly developed fintech ecosystem, widespread smartphone usage, and a strong shift toward digital financial services. UK consumers have increasingly embraced mobile-first banking, driven by the demand for more convenient, cost-effective, and innovative financial solutions. Neobanks in the UK offer a variety of services such as fee-free accounts, real-time financial tracking, and instant payments, attracting both personal and business customers. Additionally, the UK's supportive regulatory environment, including initiatives like Open Banking, has encouraged neobanks to innovate and expand their offerings. With a growing preference for digital banking, the UK is expected to remain a key player in the European neobanking market.

Major companies operating in Europe Neobanking Market are:

• N26 Bank AG
• Vivid Money S.A.
• Ma French Bank S.A.
• Orange Bank & Trust Company
• Lunar Bank A/S
• Revolut Ltd
• Bnext Group
• Holvi Payment Services Ltd
• Monzo Bank Limited
• Atom Bank Plc

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“The Europe neobanking market has experienced substantial growth due to changing consumer preferences, technological advancements, and supportive regulations. Neobanks have successfully tapped into the growing demand for digital-first, cost-effective financial services, particularly among younger, tech-savvy consumers. However, they must address challenges such as regulatory compliance, customer trust, and intense competition to maintain their market share. Despite these hurdles, the future looks bright for neobanks in Europe, as the market continues to evolve and new opportunities for innovation and growth emerge. As digital banking becomes more mainstream, neobanks are well-positioned to lead the charge in reshaping the European financial landscape.” said Mr. Karan Chechi, Research Director of TechSci Research, a research-based management consulting firm.

“Europe Neobanking Market, By Account Type (Business Account, Savings Account), By Services (Mobile-Banking, Payments and Money Transfers, Savings, Loans, Others), By Country, Competition, Forecast & Opportunities, 2020-2030F”, has evaluated the future growth potential of Europe Neobanking Market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in Europe Neobanking Market.

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