4 emerging neobanks transforming the European challenger ecosystem

By Megha Bhattacharya

Neobanks offer banking services to customers directly on their mobile phones or via other digital platforms. This digital-only bank trend has challenged the status quo of the incumbent banks as the former comes with personalised customer experience and product offerings. Neobanks have been aiming to transform the banking landscape.

Europe is considered a hotspot of neobanks and challenger banks with the UK leading the race. However, plenty of innovative digital-only banks have emerged in many European countries other than the UK. Their customer base has grown by more than 15 million, with a projection to reach 85 million by 2023, according to a research by AT Kearney.

IBS Intelligence brings you four innovative and upcoming neobanks with the potential to challenge the likes of Revolut, Monzo, etc. in the near future.

1. Bunq (Netherlands)

Amsterdam-based bunq is a challenger bank that offers a range of online financial services, primarily through its mobile app. The company’s app enables customers to open one free transaction account or up to 25 accounts for a monthly fee. Additionally, customers can request money from friends, split bills, and make payments in real-time. Businesses can also open a Bunq account.

Recently, FinTech phos announced a partnership with Dutch neobank bunq in a bid to transform payment acceptance in the retail space. bunq will be implementing phos’ solution, thus enabling customers to replace the physical POS terminals or cash with a software-based POS. Neobank bunq stated that it will be offering the new feature to its retail merchant customers across its European markets, including Belgium, France, Germany, Ireland, Italy, the Netherlands, Portugal and Spain.

2. Lunar (Denmark)

Denmark-based Lunar is a 100% digital mobile-based banking app serving individual and business customers. The app lets users pay their bills, analyze their consumption, and transfer money through the app.

The challenger bank reportedly launched an account and card designed to help teenagers better manage their money. The app has been designed for 15 to 17-year-olds and will offer a basic account and card, spend overview, saving goals, budget tools, instant notifications, and free transfers, and payments. According to Lunar, the new offering will enable it to increase its base of 150,000 users throughout the Nordics.

Recently, Lunar selected FIS‘ cloud-based treasury and risk management solution with an aim to gain support in liquidity optimisation, risk management and expansion. Lunar selected FIS’ private cloud-based Ambit Quantum for simplifying hedge accounting, regulatory compliance etc. The FinTech will implement the solution on the private cloud under a managed services contract.

Lunar claims to have more than 100,000 users in Denmark, Sweden, and Norway. The company received its banking license in 2019.

3. Bnext (Spain)

Spanish mobile-first neobank Bnext offers users a card and a linked mobile marketplace featuring banking products from select partners. The company also provides an account aggregation feature to manage traditional bank accounts from within the app. Users can connect their existing bank accounts to the platform and manage their finances in one place, at any time.

The challenger FinTech recently partnered with mobile commerce technology company, Button, in a bid to enable the neobank’s customers to shop and save money with brands including AliExpress, Groupon, and Black Limba. The partnership allows Bnext to enhance customer engagement and offer users an incentive to check their savings on their daily spend and accelerate the bank’s expansion across Spain and Mexico. Bnext, this month, also raised $13 million in a funding round led by its existing investors, including DN Capital, Redalpine, Speedinvest, Founders Future, Enern, Digital Horizons, Kreos Capital and Cometa -formerly Variv.

Launched in 2018, Bnext claims to have around 300,000 active users and more than EUR 100 million in monthly transactions. It operates in the European Union (EU) under an e-money license.

4. Holvi (Finland)

Founded in 2011 and based in Helsinki, Finland, Holvi is а digital bаnking sеrviсе fоr frееlаncеrs аnd еntrерrеnеurs. The company combines mоnеу mаnаgеmеnt tооls with user-friendly and intuitive business current accounts, for offering a banking ехреrienсе that helps users run their businesses.

Holvi developers have сrеаtеd an all-in-оnе bаnking sеrviсе, which streamlines finаnсiаl рrосеssеs. It is a business banking service for all self-employed and freelancers. Its digital business account combines invoicing, expense management, streamlined bookkeeping, and real-time business insights in one place. Holvi is a financial sеrviсе that ореratеs with its own license as a рауment institution and claims to have more than 200,000 customers (mostly in Finland and Germany).

Recently, BBVA-owned Holvi, a digital banking service for the self-employed, has been acquired by Keru FinTech Investments Oy. Keru has acquired all Holvi shares from the Spanish banking group and is the new and sole owner of Holvi with immediate effect. The owner and founding shareholder of Keru is Tuomas Toivonen, one of Holvi’s founders. Antti-Jussi Suominen, the current CEO of the FinTech, will be stepping down from his role and hand over responsibilities to Toivonen, who will lead Holvi as CEO with immediate effect.

READ MORE: Open Banking Roadmap for Mid-sized banks in Europe by IBS Intelligence