The neobank crisis: what does the future hold for them?

While neobanks have enjoyed a meteoric rise since the 2000s, they are now under the spotlight. Closures, takeovers, declining profitability - they've been through it all. So who are these neo-banks? What is their current context, and is there really a neo-bank crisis? ? We'll get back to you!  

Neobanks: a few reminders 

Neo-banks are digital banksaccessible via mobile devices. They offer a seamless customer experience and, above all free basic servicesThese include a bank card and an account management tool. 

For several years, neo-banks have been very successful thanks to their low running costs. These banks have no physical branches and few employees. What's more, customers can manage everything directly from their mobile application, and the after-sales service directly online !

According to a panorama produced by France Fintech in 2021, neobanks have reached their peak with almost 240 billion in fundraising. In France, this represents 900 French companies valued at over one billion dollars.  

For a reminder of the range of banking players, read our article : zoom on the different banking players !

Neobanks: pioneers in online banking 

Neo-banks have rapidly emerged as the most important pioneers in online offerings. They are revolutionising the traditional banking landscape with their innovative, technology-led approach. 
They offer digital services, accessible via user-friendly mobile applications, providing an alternative to traditional financial institutions. 

The target audience for neobanks is not the same as for traditional banks. In fact, neobanks are mainly aimed at a generation of consumers. digitally native. Their services are particularly suited to younger generations and people looking for alternatives to traditional banks, in particular because of low or non-existent costs. 

What's more, neobanks have also found a favourable response from contractorsand self-employed workers and small businesses. They appreciate their simplified approach to financial services and their ability to respond quickly to their cash management and payment needs.

The neobank ecosystem 

Overview of today's neobanks 

There are many new banks on the market today. Their strategies are diverse, but they all have one thing in common: they have developed through digital transformation. 

You'll find a number of neobanks, including Revolut, N26 and Qonto. 

Traditional banks are also developing their own solutions, for example : 

• Ma French Bank, created by La Banque Postale 
• Blank, created by Crédit Agricole 
• Shine acquired by Société Générale
• Anytime subsidiary of the Orange Bank group 
• Hellobank! BNP Paribas' online offer 

These players have grown rapidly. However, at the start of 2024, a whole new context is emerging and new trends are taking shape. We take a look at the current context in the rest of this article. 

Committed neobanks with high added value 

Neo-banks represent much more than just a technological evolution in the financial landscape; they are also the embodiment of a number of new trends. ideologies that underpin their vision and mission. 

Neo-banks often have values that are focused on the transparency, ethics and the social responsibility. They are committed to promoting responsible financial practices by encouraging financial education and offering tools for budget management. Our aim? To help customers make informed decisions about their money! 

This is the case, for example, with Greengot, which invests its customers' funds to support a viable and sustainable future. Every time customers make a payment with their card, the neobank donates the profits from the transaction to projects that protect the planet! 

The current context for neobanks 

The current climate for online banking is rather worrying. Between inflation and increase in interest ratesThis means less investment. Let's take a few examples to illustrate the situation:

• There Banque Postale is closing Ma French BankThis decision marks a refocusing of its activities.
• Orange has announced the closure of Orange Bank this year, heralding the end of his adventure in the banking sector.
• Crédit Mutuel Arkéa has terminated Pumpkin in 2022, five years after its acquisition, a strategic decision for the company.

Although these new banks are not going out of business, they are no longer all profitable.  

Among the remaining players, the two most profitable establishments would be :

• Fortuneo (part of Crédit Mutuel Arkéa, with 1 million customers) 
• Boursorama (a subsidiary of Société Générale, with 5 million customers) 

Neobanks & AI: towards new risks

In 2024, artificial intelligence will occupy a central position in the fintech sectoraccelerating its development. This AI boom poses major risks for neobanks, including threats of cyber securityof document fraud or even lack of transparency. 

To overcome this insecurity, fintechs can take advantage of AI-enabled tools. The Autorité des Marchés Financiers (AMF) is already using this technology to keep an eye on the various financial markets. 

But how can artificial intelligence be used to combat this insecurity? Read on to find out. 

To find out more about the risks involved in bank fraud, read our dedicated article : What are the risks and consequences of bank fraud?

Neobank crisis: how can we combat insecurity? 

To combat external threats effectively over the long term, Finovox has developed a solution for detecting false documents. Its aim? To reduce corporate document fraud by a factor of 6 - and that means you, fintechs! 

Developed using artificial intelligence, Finovox enables you to investigate and determine the following possible falsifications on your documents.
 

The best thing about the solution is that you receive a summary PDF document at the end of your analysis. You can then share it with your teams and possibly add it to a legal file! 

Would you like Finovox to become your ally in the daily fight against document fraud? Contact our experts to find out more!