Neobanks in APAC onboard more than 130 million new customers in 2021
Neobanks (or digital banks) are emerging as a driving force in the global financial sector as more customers show interest. Some regions like the Asian Pacific Countries (APAC) have registered significant growth in customers in recent months.
According to data acquired by Finbold, the APAC region Neobanks added 134.8 million customers in 2021 H1, bringing the cumulative number to 437.2 million, a growth of 44.57% from 2020’s figure of 302.4 million. In 2019, the Neobanks in the region accounted for 239.3 million total customers.
On new customer acquisition by APAC Neobanks, 2020 and 2021 has recorded growth of 113.62%, from 63.1 million to 134.8 million. The highest customer growth was recorded between 2018 and 2019 by a staggering 233 million. In 2018, the facilities added 3.2 million new customers.
Elsewhere, the region has also recorded a growth in the number of Neobanks, with 2021 H1 recording 68 cumulative platforms. India accounted for the highest figure at 14, followed by Australia’s 13. In 2020, the figure was at 64.
Traditional banks facing a challenge from Neobanks
With the growth of neobanks, traditional banks are also facing a challenge from a competitive perspective. The report highlights how the institutions are adapting to the new threat from the neobanks. According to the research report:
“However, traditional banks are still facing challenges like an outdated legacy of technology architecture. Typically, when new technologies evolve, they are established on top of a bank’s existing infrastructure, complicating it. Consequently, to keep a grip on the customer base, most traditional players are coming up with innovative technologies to tackle the threat from neobanks.”
Although neobanks are growing in popularity across the APAC region, they still face challenges stemming from factors like trust, mainly due to security concerns. However, regulators have focused on enacting laws to protect consumers.