Non-bank fintechs have quietly become very big in near-banking services.
Welcome to Neobanked, a newsletter focused on the quickly evolving UK digital banking market. I hope to gather enough interesting tidbits and news to share this every two weeks.
For me, Neobanks are digital-only offerings that apply internet economics (i.e. zero marginal costs) to the banking sector. My focus will be on companies such as Monzo, Revolut, and Starling.
Through this newsletter I hope to cover each of these companies as they continue to grow within the UK and beyond. Some of the regular features will include user number growth, new product/feature releases, and links to relevant interviews and analysis.
News this week
The peer lending business will soon offer more complete banking products, such as personal loans, credit cards, and fixed term savings.
The savings and investment app continues to grow at pace as it prepares to expand across Europe.
Plum users have increased total money saved by 5x since the start of 2020 and utility switching is up 163%.
The card aggregator is currently unavailable to all customers as the company accelerates their migration away from Wirecard. Wirecard’s liquidation and FCA suspension has hit a number of fintechs who relied on the infrastructure for rapid go-to-market.
New and upcoming feature releases
Samsung’s upcoming debit card will use Curve technology, instantly enabling any Curve compatible card to work on Samsung phones.
The open banking account aggregation feature will soon come to Revolut’s 1m Irish users. The introduction of this feature is also the first time TrueLayer, the account connecting infrastructure provider, will be used in Ireland.
The account comes with all the usual benefits (utility switching, Apple/Google Pay, notifications, savings goals, payments, low fee FX) but is expected to have a premium tier. Early sign-ups will get 12 months free.
Recent reports and studies
gohenry has revealed that their users have donated over £100,000 to the NSPCC since they launched in-app recurring donations and there’s been an increased in usage since the COVID-19 lockdown started in March. Six-to nine-year-olds led the biggest upturn, with a 34% increase in donations from this age group.
Curve and Plum are two of the most interesting non-bank but nearly bank providers in the UK fintech space right now.
- Curve faces immediate challenges due to the Wirecard situation but is extremely well positioned to control an entirely new category of spending services; there’s basically no-one offering a comparable product and their service adds genuine value to a user’s financial life.
- Likewise, Plum has made significant strides helping customers prepare for a rainy day situation and softly introducing investment opportunities to those who would otherwise not consider it. Their new cashback rewards and community benchmarking features bring them closer to acting as a central financial hub for savings and spending.
There’s been talk over the last few years that the UK digital banking space was beginning to mature - with Revolut, Starling, and Monzo owning the space and little room for new entrants. But the next breed of financial tools is completely re-thinking the core needs of consumer savings and spending.