Neobank era

Neobanks are challenging traditional banks with their digital-only banking services and have been growing fast in the last few years. For instance, both Sweden’s Klarna and Brazil’s Nubank have surpassed 100 million customers. Revenue growth has also been high for most neobanks with some doubling revenue over the last two years. As with most new industries, the challenge is turning a profit. According to consultancy BCG, only 23 out of 453 neobanks were profitable in 2023. Among those were some of the largest neobanks who have successfully scaled their business and managed cost accordingly. It looks like neobanks are making progress with several reporting record profitability and others turning profitable in recent quarters. You can read more about neobanks here.

Source: company filings, August 2024.