Mercury, N26, Monzo, Nubank, Revolut. They are the way to the banishment of Gen Z. But their rise favors the innovation of their own competitors: traditional banks.
“What do you think we are? A bank?"playfully, but not too much, recites a current Billboard in the NE metropolitana Current is just one of hundreds of neo-banks that have been born in the last ten years in the four corners of the planet. Startups that, taking advantage of technological innovation, FinTech, challenge traditional banks by offering customers similar services and products, but simpler to use and often with reduced costs. All on the Internet. Until 2020, with Covid, they were the disruptive phenomenon of the moment in banking. The lockdon and the shutdown of consumption and trade, surprisingly, had affected them more than traditional banks, putting their run in crisis. But in 2021, the resurrection: now Monzo, N26, Nubank, Revolut and compagnia bella run like never before. Or at least in terms of market value. The incumbent institutions, however, those of the ‘good and old’ branch, did not stand by.
Since the beginning of ten years they have arrived on the market they are disrupting the traditional banking landscape. In 2019, says an analysis by Eton One every five days. Their offerings are focused on individual customers, small and medium-sized businesses, through a multiplicity of digital tools made available to them: remittances, money transfers, utility payments, personal finance management apps. All online. All with one click. They are banks, but without counters. They 'attack' a specific segment of banking customers, first loyal to traditional institutions – physical ones – through more convenient and customized offers and products. And, thanks to technology, easier to use.
Customers of good and old branches, but not only. Because neo-banks represent the gateway into the financial system for Generation Z, the age group, as we have already seen on the pages of this newspaper, less bankrupted. The so-called Zoomers, born after 1995, are the first not to be interested in opening old-fashioned bank positions. What they are looking for are hyper-customized solutions. One, at most two services. And not the full package. It is easy, therefore, to understand why in recent years these banks in startup version – neo-banks, in fact – have had an easy game in winning new customers. The incumbents-the traditional banks-had not yet embraced the novelties of the digital revolution.
Read also: best laptop for music production
The problem with neo-banks, however, is that they have focused only on acquiring new customers, without focusing on the sustainability of their business. Without achieving, as often happens to startups in the first years of activity, the profitability necessary to guarantee its existence. When the pandemic hit the world economy like a hurricane in 2020, many expected a definitive consecration of neo-banking. With people forced home, more and more digitized, it seemed like a fate already written. But things turned out differently. As the analysis by Etonton Consulting shows, the new actors were not prepared to face prolonged adverse scenarios.
For example, N26 failed to obtain unemployment benefits in Spain. French and German neo-banks were excluded from the distribution of government support funds. Monzo has struggled to respond efficiently to the need for large loan provisions. True: the pandemic has fostered digitalization in all sectors, including banking. Thus helping actors who by their nature were born 'remotely'. However, as the Financial Times recently pointed out, the decision by governments and central banks to inject a robust dose of liquidity into traditional banks, to support businesses and households, has turned the pandemic into a boomerang for challengers. Thus, the crisis has mainly affected the latter.
In June 2020, the valuation of Britain's Monzo, which had made phosphorescent credit cards its great workhorse, plummeted from $ 2.6 billion to $ 1.6 billion in one fell swoop. It was forced, among other things, to lay off 120 employees. A considerable share of staff for a digital company. Similar problems for the German N26, which in the first months of the pandemic has recorded revenues of 50 million dollars, but in the face of operating losses of almost 90. The problem, for neo-banks, is that for too many years they have based their investors ' bets only on acquiring new customers. But without paying attention to the construction of a sustainable business model in the long term.
A few months pass, and along with the recovery of the global economy and consumption comes the twist. The neo-bank crisis of 2020 turns into Resurrection in 2021. Their race has restarted:
Death and resurrection of the neo-banks, we said. But the roller coaster is not over. In recent months, in fact, hand in hand with the return to growth, anti-money laundering investigations have touched some of the most important pla pla The German N26, which can now count on seven million customers spread across more than twenty countries, in May 2021 was joined by a decision by the Berlin regulatory authority in the Financial Field. In fact, BaFin has appointed a special supervisor, an external firm, to monitor the efforts made by the German FinTech on the antimone La
The sensational anti-money laundering investigations show that these actors are still in a consolidation phase. Indeed, according to some observers, in reality the neo-banks 'make a lot of smoke, but little roast'. For the simple reason that in reality, the digitization of the traditional banking system – also favored by the advent of the neo-banks themselves – is now a sure fact. Indeed, the banking giants have by their nature more volume and capital, at least on paper, to reap the benefits of the FinTech revolution. Especially when a virtuous coopetition is triggered.
One day, when even incumbents will offer hypercustomized services designed for the individual and no longer for a group of users or even a generation, it will become difficult to distinguish incumbents and challengers in the banking sector. At that point it will be seen, as etonton Consulting points out, which neo-banks will have reached the ‘age of majority’ and can begin to walk on their feet, better monetizing their services.
Sources: Financial Times, HuffPost
The fourth edition of ITIL (IT Infrastructure Library) was presented by Axelos in February 2019. The ITIL v4 (PDF and other versions available) focuses on practical aspects of IT management and provides a holistic approach with emphasize on Agile, DevOps and digital transformation topics.#2The Subtle Art of Not Giving a Fuck
The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life. In this generation-defining self-help guide, a superstar blogger cuts through the crap to show us how to stop trying to be “positive” all the time so that we can truly become better, happier people. For decades, we’ve […]#3Read People Like a Book
Read People Like a Book: How to Analyze, Understand, and Predict People’s Emotions, Thoughts, Intentions, and Behaviors (How to be More Likable and Charismatic).#4Fundamentals of Corporate Finance
Fundamentals of Corporate Finance 13th Edition (International Edition). This book was designed and developed explicitly for a first course in business or corporate finance, for both finance majors and non-majors alike. In terms of background or prerequisites, the book is nearly self- contained, assuming some familiarity with basic algebra and accounting concepts, while […]#5The Intelligent Investor
One of the greatest investors of the twentieth century, Benjamin Graham, proposed his philosophy of “value investing” that could protect investors from dramatic errors and teaches them to develop long-term strategies. This approach is exhaustively explained in The Intelligent Investor (PDF download available) book, which remains the stock market bible since its first […]#6How Money Works
Money is the oil that keeps the machinery of our world turning. By giving goods and services an easily measured value, money facilitates the billions of transactions that take place every day. Without it, the industry and trade that form the basis of modern economies would grind to a halt and the flow […]#7Business Communication
Everyday Business Storytelling: Create, Simplify, and Adapt A Visual Narrative for Any Audience. Communication is one of the basic functions of management in any organization and its importance can hardly be overemphasized. It is a process of transmitting information, ideas, thoughts, opinions and plans between various parts of an organization. Good and effective […]#8How Business Works
Every type of business has to choose an ownership structure. Although there are variations globally, most countries offer similar types of legal entities, from a single- person private enterprise to a massive organization trading on a stock exchange. There are three key considerations: how big the venture is expected to grow; the complexity […]#9The Essential Manager’s Handbook
The step up to a managerial role can be an exciting, but daunting, new challenge. Suddenly, you are responsible for making sure your team is working together, achieving results, and that overall your department is running smoothly. There is no single technique to becoming an excellent manager, but the Essential Manager’s Handbook provides […]#10Operations Management
Operations Management is important, exciting, challenging, and everywhere your look! Important, because it’s concerned with creating all of the products and services upon which we depend. Exciting, because it’s at the centre of so many of the changes affecting the world of business. Challenging, because the solutions that we find need to work […]
In 1940 Fred Schwed, a stockbroker whose father had lost everything as a short seller on Wall Street during the Roaring Twenties, published this timeless classic on how the stock market really works. Schwed, a pleasure-loving, cultured man who had been expelled from Princeton University in his final year for entertaining a lady […]#12Corporate Finance 11th Edition
Corporate Finance, Eleventh Edition This book has been written for the introductory courses in corporate finance at the MBA level and for the intermediate courses in many undergraduate programs. Some instructors will find our text appropriate for the introductory course at the undergraduate level as well.#13ISE International Business: Competing in the Global Marketplace
The 13th edition provides a complete solution that is relevant (timely, comprehensive), practical (focus on applications of concepts), integrated (integrated progression of topics) and the most up-to-date on the market. Available with Connect: Our highly reliable homework and learning management solution that embeds learning science and award-willing adaptive tools to improve student results.#14Winning: The Unforgiving Race to Greatness
Winning: The Unforgiving Race to Greatness (Tim Grover Winning Series) From the elite performance coach who wrote the international bestseller Relentless and whose clients included Michael Jordan, Kobe Bryant, and Dwyane Wade, comes this brutally honest formula for winning in business, sports, or any arena where the battle is relentless.#15Your Next Five Moves: Master the Art of Business Strategy
From the creator of Valuetainment, the number one YouTube channel for entrepreneurs, comes a practical and effective guide for thinking more clearly and achieving your most audacious business goals. Both successful entrepreneurs and chess grandmasters have the vision to look at the pieces in front of them and anticipate their next five moves. […]#16Your Next Five Moves
Your Next Five Moves: Master the Art of Business Strategy (Hardcover / Audio / Kindle). Creator of Valuetainment, the # 1 YouTube channel for entrepreneurs and “one of the most exciting thinkers” (Ray Dalio, Principles author) in business today, provides a practical and effective guide to thinking more clearly and getting the most out […]#17Finding the Winning Edge
When those who chronicle the history of the game list the individuals who had the greatest impact on the National Football League, Bill Walsh will clearly be among the names of Halas, Lombardi, Brown, Landry, Noll and Shula. But when you consider who has impacted the game most in terms of those who […]#18International GAAP 2020 2021
Generally Accepted Accounting Practice under International Financial Reporting Standards. The content of this book takes into account all accounting standards and other relevant rules issued up to September 2020. Consequently, it covers the IASB’s Conceptual Framework for Financial Reporting and authoritative literature listed below. References in the main text of each chapter to […]#19Schweser FRM Part I Secret Sauce
This review book is a valuable addition to the study tools of any FRM exam candidate. It offers concise coverage of exam topics to enhance your retention of the FRM curriculum. We suggest that you use this book as a companion to your other, more comprehensive study materials.#20We Should All Be Millionaires
We Should All Be Millionaires: A Woman’s Guide to Earning More, Building Wealth, and Gaining Economic Power. Are you ready to fill your life with more peace, power and joy? We Should All Be Millionaires details a realistic, achievable and step-by-step path to create the support, trust and plan you need to master […]