- Neobanks have surged ahead of traditional banks in app user acquisition, boasting 18 million more users compared to their legacy counterparts in 2023.
- The rise of neobanks, characterised by their online-only presence and absence of physical branches, has reshaped the landscape of consumer banking.
- Revolut emerges as a dominant force in the European banking scene, capturing 38% of all new banking app downloads in the UK and Europe, while legacy banks like NatWest are still expanding their digital offerings.
Neobanks have surpassed traditional banks in terms of app user acquisition in 2023, with 18 million more app users than their legacy rivals, according to recent App Radar report.
Neobank surge
A neobank is a kind of direct bank that competes with regular banks by just using internet banking and does not have any typical physical branch networks.
Consumer banking habits have undergone a substantial transition, as seen by the rise in popularity of digital platforms like Tandem Bank, which witnessed a 110% increase in new app downloads over the previous year.
Revolut and Monzo, two other fintech digital companies, reported significant growth as well, rising by 46% and 20%, respectively.
Also read: Neobank Revolut launches iPad point-of-sale app for hospitality
Revolut now accounts for 38% of all new banking app downloads in the UK and Europe. Its overall user base has increased dramatically as a result of this expansion, positioning it as the leading European neobank.
However, legacy banks have not completely fallen behind. In 2023, NatWest, a major retail and commercial bank in the UK, reported an 18% rise in downloads, indicating that legacy banks are still successfully growing their digital products.
Also read: Bank of America puts banking, investing, retirement into one app
Expert’s insight: Revolut’s pivotal role
Thomas Kriebernegg, general manager of SplitMetrics Agency, app growth provider, highlighted: “This is fantastic news for the banking and finance app category. The sector is growing with 13% more downloads on Android devices in 2023. FinTech and neobanks are continuing to close the gap with legacy banks, which is not surprising as it is a trend we have been seeing for the past four or so years.”
He further emphasised Revolut’s pivotal role in driving change. Revolut’s success in acquiring Android downloads could potentially redirect focus from traditional banks to neobanks. However, sustaining this growth may incur significant costs, with the cost per acquisition, measuring the expense borne by a company to acquire a new customer or user, standing at $8.
