Traditionally, the financial sector has been one of the most impenetrable markets. But with confidence in banks at historically low levels, new digital-only players are seizing their chance .
The 2008 global financial crisis resulted in the loss of millions of jobs and trillions of dollars’ worth of financial capital. For many, the blame resided squarely with the banking sector and the individuals that got rich from laissez-faire regulations and speculative investments.
With confidence in the banking sector at historically low levels, a group of upstarts have glimpsed a remarkable opportunity – one that may not present itself again for decades. A new kind of digital-only financial institution known as a ‘neobank’ – sometimes referred to as a ‘challenger bank’ – has emerged to capitalise on the resentment felt towards the industry’s incumbents.
To unsettle the leading players, these neobanks will need to do more than simply capitalise on the negative perception of long-established financial institutions. They will need to offer a positive alternative of their own that is more convenient, more secure and cheaper than what is currently available. Even if they achieve this, regulatory hurdles and a lack of market penetration could still prove to be their undoing.
Source https://www.worldfinance.com/banking/the-unstoppable-rise-of-neobanks
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