Araştırma Makalesi
BibTex RIS Kaynak Göster

THE GLOBAL RISE OF NEOBANKS AND CHALLENGER BANKS: DISRUPTION IN THE BANKING SECTOR

Yıl 2025, Cilt: 14 Sayı: 1, 15 - 24, 30.07.2025

Ahmad Al-harbi

Öz

Purpose- This paper explores the rise of neobanks and challenger banks, analysing their transformative impact on the traditional banking sector. It argues these technology-driven entities reshape financial services through efficient, customer-centric solutions meeting modern consumer preferences.
Methodology-The study employs a qualitative research approach via a comprehensive literature review, examining academic articles, industry reports, and case studies.
Findings- Findings reveal a significant shift towards digital banking, driven by historical context, technological advancements (like mobile banking, AI, open banking APIs), and changing consumer behavior favouring convenience, transparency, cost-effectiveness, and personalization. Detailed case studies of neobanks like Revolut, Chime, and Nubank illustrate successful strategies disrupting traditional norms. These banks leverage technology for lower fees, enhanced user experience, and financial inclusion. The analysis highlights the pressure on traditional banks to innovate and adapt amidst this digital transformation.
Conclusion- Neobanks and challenger banks represent a fundamental shift, compelling traditional institutions to embrace digital transformation to remain competitive. The paper underscores the need for adaptation and addresses the regulatory challenges posed by these emerging financial players.

Anahtar Kelimeler

Neobanks challenger banks digital banking fintech financial innovation banking disruption consumer behavior

Kaynakça

  • Accenture. (2023). Accenture global banking consumer study: Reignite human connections to discover hidden value. Retrieved October 10, 2024, from https://www.accenture.com/us-en/insights/banking/global-banking-consumer-study.
  • Arena, M. (2022). The Evolution of the Digital Payment Industry in Europe: An Analysis of Customers and Profitability Outlook as Business Model-s Elements of Digital Banks (Master's thesis, Universidade NOVA de Lisboa (Portugal)).
  • Arun, T., Markose, S., Murinde, V., Kostov, P., Khan, A., Ari, N., & Sethi, R. (2023). Impact of Neo-banks (Digital Banks) UK–India Comparison.
  • Barodawala, Y. A. (2022). Neo banking: An innovative window of banking arena. Global Journal of Interdisciplinary Studies, 3, 27-33.
  • Bataev, A., & Bataeva, K. (2021, October). Challenger banks performance model. In Proceedings of the 3rd International Scientific Conference on Innovations in Digital Economy (pp. 425-433).
  • Bradford, T. (2020). Neobanks: Banks by any other name. Federal Reserve Bank of Kansas City, Payments System Research Briefing, August, 12, 1-6.
  • Buchi, G., Fasolo, L., Cugno, M., Zerbetto, A., & Castagnoli, R. (2019). New Banks in th 4th Industrial Revolution: A Review and Typology. In Proceedings of 22nd Excellence in Services International Conference (pp. 1-21). Università di Verona.
  • Chrzanowski, M., & Dąbrowski, I. K. (2021). A dynamic perspective on competition between traditional banking and banking fintechs. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 65(2), 1-14.
  • Corander, B. (2021). Neobanks: Challenges, Risks and Opportunities.
  • Curran, S. (2024). The effects of Neobanks on the Irish consumer and barriers to adoption (Doctoral dissertation, Dublin Business School).
  • Damsgaard, J. (2021). A Challenger Bank’s Entry Strategy Into a New Market.
  • Deloitte. (2020). Deloitte’s second biennial global cost survey: Cost management practices and trends in the banking sector. Retrieved November 28, 2024, from https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Consulting/deloitte-cn-fsi-cost-survey-en-200428.pdf.
  • Dinçkol, D. (2021). Industry disruption in UK banking: the evolution of regulation, technology adoption and business models (Doctoral dissertation, University of Warwick).
  • eMarketer. (2024). Social media's role in consumer decision-making. Retrieved October 19, 2024 from https://www.emarketer.com/insights/social-media-paid-ads/.
  • Federal Reserve. (2024). Federal Reserve surveys on faster and instant payments. Retrieved November 28, 2024, from https://www.frbservices.org/news/press-releases/050624-faster-instant-payment-surveys.
  • Gust, M. (2021). Traditional Banking And Fintech Disruption. Projections, Dynamics, Competition And Efficiency. REVISTA ECONOMIA CONTEMPORANĂ, 6(4), 67-76.
  • J.D. Power. (2024). 2024 Digital Banking Satisfaction Study. Retrieved December 26, 2024 from https://www.jdpower.com/business/retail-banking-study-1.
  • Johnson, M. (2021). Challenger banks are dead, long live challenger banks. Journal of Digital Banking, 5(4), 329-341.
  • Kashyap, A. THE EMERGENCE AND IMPACT OF NEO BANKS: A COMPREHENSIVE REVIEW. BEYOND BORDERS, 19.
  • Lindström, V., & Nilsson, O. (2023). The sudden rise of neobanks and the threat it poses upon the traditional banking system.
  • Liu, X. (2024). FINTECH DISRUPTION IN TRADITIONAL BANKING: OPPORTUNITIES AND CHALLENGES FOR FINANCIAL INSTITUTIONS.
  • McKinsey & Company. (2020). How COVID-19 has pushed companies over the technology tipping point—and transformed business forever. Retrieved October 22, 2024, from https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever .
  • McKinsey & Company. (2021). Asia-Pacific digital banking accelerating, led by emerging markets. Retrieved October 22, 2024, from https://www.devdiscourse.com/article/international/1745588-mckinsey-report-asia-pacific-digital-banking-accelerating-led-by-emerging-markets .
  • Majid, A. The Evolution of Neo-Banks in Europe.
  • Menegon, A. (2020). FinTechs and Challenger Banks: Old Business, Brand New Approach. Iason Consulting Ltd.
  • Mogaji, E. (2023). Redefining banks in the digital era: a typology of banks and their research, managerial and policy implications. International Journal of Bank Marketing, 41(7), 1899-1918.
  • Mogaji, E., & Nguyen, N. P. (2024). High street banking on the app: branding strategies of traditionally-driven neobanks. International Journal of Bank Marketing, 42(2), 301-330.
  • Nicoletti, B., & Nicoletti, B. (2021). Proposition of value and Fintech organizations in Banking 5.0. Banking 5.0: How Fintech Will Change Traditional Banks in the'New Normal'Post Pandemic, 91-152.
  • Onashabay, N. (2021). Effects of Covid-19 pandemic on the key profitability factors of digital challenger banks. Starling Bank case study (Doctoral dissertation, Central European University).
  • PwC Australia. (2021). Customer banking survey 2021: The great banking transition. Retrieved November 02, 2024, from https://www.pwc.com.au/consulting/transforming-financial-services/customer-banking-survey.html
  • Rogers, J. (2021). FinTech Disruption: What the impacts of Neobanks on the Irish retail banking consumer?.
  • Santos, S. M. S. (2018). Traditional and Challenger banks in UK: Comparison in terms of customer value. Universidade Catolica Portuguesa (Portugal).
  • Shanti, R., Siregar, H., & Zulbainarni, N. (2024). Revolutionizing Banking: Neobanks’ Digital Transformation for Enhanced Efficiency. Journal of Risk and Financial Management, 17(5), 188.
  • Singh, L. (2022). Future of Banking: With Emerging Technologies–A case study with MCB (Doctoral dissertation, Amity University (Mauritius).
  • Temelkov, Z. (2020). Differences between traditional bank model and fintech based digital bank and neobanks models. SocioBrains, International scientific refereed online journal with impact factor, (74), 8-15.
  • Wamsler, B. J. P. (2023). Neo-banks versus traditional banks: a comparative study of operations and financial performance in Europe (Master's thesis, ISCTE-Instituto Universitario de Lisboa (Portugal)).
  • Waupsh, J. (2022). How hyper-personalisation is fuelling digital banking’s second wave. Journal of Digital Banking, 7(2), 122-128.
  • Zoi, S. (2021). FinTech and digital transformation in financial services: a new digital financial world (Master's thesis, Πανεπιστήμιο Πειραιώς).

Yıl 2025, Cilt: 14 Sayı: 1, 15 - 24, 30.07.2025

Ahmad Al-harbi

Öz

Kaynakça

  • Accenture. (2023). Accenture global banking consumer study: Reignite human connections to discover hidden value. Retrieved October 10, 2024, from https://www.accenture.com/us-en/insights/banking/global-banking-consumer-study.
  • Arena, M. (2022). The Evolution of the Digital Payment Industry in Europe: An Analysis of Customers and Profitability Outlook as Business Model-s Elements of Digital Banks (Master's thesis, Universidade NOVA de Lisboa (Portugal)).
  • Arun, T., Markose, S., Murinde, V., Kostov, P., Khan, A., Ari, N., & Sethi, R. (2023). Impact of Neo-banks (Digital Banks) UK–India Comparison.
  • Barodawala, Y. A. (2022). Neo banking: An innovative window of banking arena. Global Journal of Interdisciplinary Studies, 3, 27-33.
  • Bataev, A., & Bataeva, K. (2021, October). Challenger banks performance model. In Proceedings of the 3rd International Scientific Conference on Innovations in Digital Economy (pp. 425-433).
  • Bradford, T. (2020). Neobanks: Banks by any other name. Federal Reserve Bank of Kansas City, Payments System Research Briefing, August, 12, 1-6.
  • Buchi, G., Fasolo, L., Cugno, M., Zerbetto, A., & Castagnoli, R. (2019). New Banks in th 4th Industrial Revolution: A Review and Typology. In Proceedings of 22nd Excellence in Services International Conference (pp. 1-21). Università di Verona.
  • Chrzanowski, M., & Dąbrowski, I. K. (2021). A dynamic perspective on competition between traditional banking and banking fintechs. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 65(2), 1-14.
  • Corander, B. (2021). Neobanks: Challenges, Risks and Opportunities.
  • Curran, S. (2024). The effects of Neobanks on the Irish consumer and barriers to adoption (Doctoral dissertation, Dublin Business School).
  • Damsgaard, J. (2021). A Challenger Bank’s Entry Strategy Into a New Market.
  • Deloitte. (2020). Deloitte’s second biennial global cost survey: Cost management practices and trends in the banking sector. Retrieved November 28, 2024, from https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Consulting/deloitte-cn-fsi-cost-survey-en-200428.pdf.
  • Dinçkol, D. (2021). Industry disruption in UK banking: the evolution of regulation, technology adoption and business models (Doctoral dissertation, University of Warwick).
  • eMarketer. (2024). Social media's role in consumer decision-making. Retrieved October 19, 2024 from https://www.emarketer.com/insights/social-media-paid-ads/.
  • Federal Reserve. (2024). Federal Reserve surveys on faster and instant payments. Retrieved November 28, 2024, from https://www.frbservices.org/news/press-releases/050624-faster-instant-payment-surveys.
  • Gust, M. (2021). Traditional Banking And Fintech Disruption. Projections, Dynamics, Competition And Efficiency. REVISTA ECONOMIA CONTEMPORANĂ, 6(4), 67-76.
  • J.D. Power. (2024). 2024 Digital Banking Satisfaction Study. Retrieved December 26, 2024 from https://www.jdpower.com/business/retail-banking-study-1.
  • Johnson, M. (2021). Challenger banks are dead, long live challenger banks. Journal of Digital Banking, 5(4), 329-341.
  • Kashyap, A. THE EMERGENCE AND IMPACT OF NEO BANKS: A COMPREHENSIVE REVIEW. BEYOND BORDERS, 19.
  • Lindström, V., & Nilsson, O. (2023). The sudden rise of neobanks and the threat it poses upon the traditional banking system.
  • Liu, X. (2024). FINTECH DISRUPTION IN TRADITIONAL BANKING: OPPORTUNITIES AND CHALLENGES FOR FINANCIAL INSTITUTIONS.
  • McKinsey & Company. (2020). How COVID-19 has pushed companies over the technology tipping point—and transformed business forever. Retrieved October 22, 2024, from https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever .
  • McKinsey & Company. (2021). Asia-Pacific digital banking accelerating, led by emerging markets. Retrieved October 22, 2024, from https://www.devdiscourse.com/article/international/1745588-mckinsey-report-asia-pacific-digital-banking-accelerating-led-by-emerging-markets .
  • Majid, A. The Evolution of Neo-Banks in Europe.
  • Menegon, A. (2020). FinTechs and Challenger Banks: Old Business, Brand New Approach. Iason Consulting Ltd.
  • Mogaji, E. (2023). Redefining banks in the digital era: a typology of banks and their research, managerial and policy implications. International Journal of Bank Marketing, 41(7), 1899-1918.
  • Mogaji, E., & Nguyen, N. P. (2024). High street banking on the app: branding strategies of traditionally-driven neobanks. International Journal of Bank Marketing, 42(2), 301-330.
  • Nicoletti, B., & Nicoletti, B. (2021). Proposition of value and Fintech organizations in Banking 5.0. Banking 5.0: How Fintech Will Change Traditional Banks in the'New Normal'Post Pandemic, 91-152.
  • Onashabay, N. (2021). Effects of Covid-19 pandemic on the key profitability factors of digital challenger banks. Starling Bank case study (Doctoral dissertation, Central European University).
  • PwC Australia. (2021). Customer banking survey 2021: The great banking transition. Retrieved November 02, 2024, from https://www.pwc.com.au/consulting/transforming-financial-services/customer-banking-survey.html
  • Rogers, J. (2021). FinTech Disruption: What the impacts of Neobanks on the Irish retail banking consumer?.
  • Santos, S. M. S. (2018). Traditional and Challenger banks in UK: Comparison in terms of customer value. Universidade Catolica Portuguesa (Portugal).
  • Shanti, R., Siregar, H., & Zulbainarni, N. (2024). Revolutionizing Banking: Neobanks’ Digital Transformation for Enhanced Efficiency. Journal of Risk and Financial Management, 17(5), 188.
  • Singh, L. (2022). Future of Banking: With Emerging Technologies–A case study with MCB (Doctoral dissertation, Amity University (Mauritius).
  • Temelkov, Z. (2020). Differences between traditional bank model and fintech based digital bank and neobanks models. SocioBrains, International scientific refereed online journal with impact factor, (74), 8-15.
  • Wamsler, B. J. P. (2023). Neo-banks versus traditional banks: a comparative study of operations and financial performance in Europe (Master's thesis, ISCTE-Instituto Universitario de Lisboa (Portugal)).
  • Waupsh, J. (2022). How hyper-personalisation is fuelling digital banking’s second wave. Journal of Digital Banking, 7(2), 122-128.
  • Zoi, S. (2021). FinTech and digital transformation in financial services: a new digital financial world (Master's thesis, Πανεπιστήμιο Πειραιώς).
Toplam 38 adet kaynakça vardır.

Ayrıntılar

Birincil Dil İngilizce
Konular Finans, Finans ve Yatırım (Diğer), İşletme
Bölüm Articles
Yazarlar

Ahmad Al-harbi 0000-0003-1593-7835

Yayımlanma Tarihi 30 Temmuz 2025
Gönderilme Tarihi 27 Mart 2025
Kabul Tarihi 9 Haziran 2025
Yayımlandığı Sayı Yıl 2025 Cilt: 14 Sayı: 1

Kaynak Göster

APA Al-harbi, A. (2025). THE GLOBAL RISE OF NEOBANKS AND CHALLENGER BANKS: DISRUPTION IN THE BANKING SECTOR. Journal of Business Economics and Finance, 14(1), 15-24. https://doi.org/10.17261/Pressacademia.2025.1974

Journal of Business, Economics and Finance (JBEF) is a scientific, academic, double blind peer-reviewed, semi-annual and open-access journal. The publication language is English. The journal publishes 2 issues a year. The issuing months are June and December. The journal aims to provide a research source for all practitioners, policy makers and researchers working in the areas of business, economics and finance. The Editor of JBEF invites all manuscripts that that cover theoretical and/or applied researches on topics related to the interest areas of the Journal. JBEF charges no submission or publication fee.



Ethics Policy - JBEF applies the standards of Committee on Publication Ethics (COPE). JBEF is committed to the academic community ensuring ethics and quality of manuscripts in publications. Plagiarism is strictly forbidden and the manuscripts found to be plagiarized will not be accepted or if published will be removed from the publication. Authors must certify that their manuscripts are their original work. Plagiarism, duplicate, data fabrication and redundant publications are forbidden. The manuscripts are subject to plagiarism check by iThenticate or similar. All manuscript submissions must provide a similarity report (up to 15% excluding quotes, bibliography, abstract, method).


Open Access - All research articles published in PressAcademia Journals are fully open access; immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Open access is a property of individual works, not necessarily journals or publishers. Community standards, rather than copyright law, will continue to provide the mechanism for enforcement of proper attribution and responsible use of the published work, as they do now.