Stéphane Dehaies, Partner at KPMG France, has just published the latest edition of the "Panorama des néobanques en France" study, in partnership with Ipsos. The results are clear: neobanks are continuing to grow, both in Europe and internationally, with no fewer than 3.5 million active customers in France at the end of 2019.
International development
Today, there are 18 neobanks in France, catering either to individuals, professionals and businesses, or both targets. Seven new players entered the market in 2019: Monese, Xaalys, Holvi, Ma French Bank, Kard, PayKrom and Pixpay. Six more are expected to appear soon.
Some neobanks, well established in France, have set out to conquer Europe or other continents. Among the neobanks aimed at professionals, we note the internationalization of Anytime, which has expanded into several European countries.
Transfer Wise, which caters for both private and business customers, has established itself on four continents: Europe, North America, South America, Asia and Oceania. In all, it is present in 24 countries, with 6 million users to date.
Numerous partnerships for a better customer experience
Unlike traditional banks, neobanks do not seek to reach all target groups. They focus on a specific customer segment, and offer a low-cost strategy, concentrating on day-to-day banking. As a result, they save money and can offer lower rates than traditional banks.
At the same time, neobanks are extending their offering by setting up partnerships with players in both the financial (insurance, financing) and non-financial (travel, loyalty programs) sectors. In this way, partners complement the banking offer and provide an excellent customer experience at lower cost.
As Stéphane Dehaies writes in his report, "the new entrants to the banking landscape are gradually gaining the trust of consumers and becoming part of their habits. They are no longer the preserve of 'trendsetting' customers, always on the lookout for innovative services." Neobank customers are diversifying, and are no longer just millenials, i.e. those aged 18-30. The over-45s are also interested, but prefer neobanks with a physical network.
Fierce competition between banks and neobanks
As their customer base diversifies, neobanks find themselves in direct competition with online banks. The latter, for their part, are trying to launch attractive offers for millenials, as Boursorama has done with Ultim and Fortuneo with Fosfo, two offers that offer free payments and withdrawals abroad, and cards with no account maintenance fees.
The new challenge for neobanks is to maintain their original model while enriching their range of banking services, in order to acquire and retain customers with a higher average income. According to the report published by Stéphane Dehaies and Ipsos, these customers are ready to make their neobank their main bank if it offers them more banking services.