Different neobank strategies give different fundamentals.
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
Thirteen fintechs, including Curve, have applied for the re-opened £100m Banking Competition Remedies fund after Metro and Nationwide return £50m each. They plan on launching a company expenses card and SME credit facilities with the funding.
The Spark infrastructure gives businesses the ability to receive, store, and send funds in 30+ currencies around the world.
The bank reemphasised its expectation of profitability in 2020, driven in large part by a doubling of their business account user base to over 200,000. Their plans to expand internationally have been reinvigorated after pausing at the end of 2019.
Announced on Twitter, Monzo’s third attempt at a subscription offering has seen stronger initial interest than previous versions reaching ~1.25% penetration in one month. I heard the first version had low 10s of thousands of users after a few months.
New and upcoming feature releases
Announced a while back, the Samsung Pay card has all the usual Curve features (multi-card aggregation, back in time payment switching) and is accessible directly in the phone’s wallet app.
A simple way for customers to track, split, and settle expenses.
Recent reports and studies
A great summary and comparison of Monzo, Revolut, and Starling’s annual reports. Different fundamentals for each across growth, cost, revenue, and diversification.
A look at the unhelpful phrase “removing friction” and what it specifically should mean.
Fintech infrastructure companies are transforming the technology and financial services industries through APIs, enabling virtually any software company to offer financial products directly to their end customers through embedded fintech.
It continues to feel like Monzo, Revolut, and Starling are running the same race - perhaps at different paces and optimising for different metrics - whilst Curve tries to adjust the running track to compete without them noticing. N26 bowed out early, blaming Brexit, and it’s been reassuring to see no neobank casualties from the pandemic (yet).