Intel Report Digital Banking - Flipbook - Page 10
CHALLENGES AND OPPORTUNITIES
Of course, digital banks came on the scene long before the
niche banking trend appeared. The platforms that have been
Which digital banking service/branchless
bank(s) do you currently have an account with?
Respondents were asked to select all that apply.
Sample Size: 324
19.8%
Chime
Capital One 360
10.7%
USAA
10.6%
Varo Money
tend to be older, such as Chime, which was founded in 2014,
and Ally Bank, a subsidiary of Detroit-based Ally Financial,
which has been around since 2000.
USAA’s roots predate the advent of the personal computer
and was one of the first digital-only banks in the United
States. It survived by focusing on its core customers, active
8.7%
Ally Bank
around long enough to build a significant national brand
and retired members of the military and their families.
6.7%
But others innovated and then disappeared, such as bud-
Green Dot Bank (GoBank)
5.8%
geting neobank Simple, which was bought by BBVA USA
Acorns
5.3%
Bancshares in 2014, and shut down in 2021 with that
Synchrony Bank
4.8%
bank’s acquisition by PNC Financial Services Group.
Discover
4.7%
American Express
4.2%
in 2020 a couple years after its launch as it reportedly
Stash
3.9%
struggled to acquire new customers in an already saturated
Simple
3.3%
market, writes Forrester Research’s Senior Analyst Zhi-Ying
Robinhood
2.6%
Barry, responding to emailed questions.
Aspiration
2.6%
Dave
2.4%
MoneyLion
2.2%
SoFi Money
2.1%
able to identify 13 profitable digital challenger banks in the
Current
2.0%
world, 10 of them in Asia, according to a June 2021 report.
Marcus by Goldman Sachs
1.8%
Affirm
1.2%
T-Mobile Money
1.0%
Betterment
0.7%
BankMobile
0.7%
N26
0.6%
Amazon was public for six years before posting a profit.
Zero
0.5%
“The last five years have found that you don’t have to be
Empower
0.3%
profitable to be a company,’’ says Unconventional Ventures’
Personal Capital
0.2%
Other
Source: S&P Global Market Intelligence,
2021 Mobile Banking Survey
8 | FINXTECH INTELLIGENCE REPORT
The German neobank N26 pulled out of the United Kingdom
Profitability, of course, is key to long-term sustainability,
but that doesn’t mean all digital platforms are focused on
that. Globally, in fact, the Boston Consulting Group was only
Although many scoff at the valuations of unprofitable
technology companies, it’s true that some of them, such
as Facebook and Amazon.com, invested heavily in growing
their businesses and building market share before becoming
profitable. Their investors didn’t punish them for that fact.
Leimer.
29.3%
Whether or not they’re focused on profit, growing and scaling their businesses while turning customers into revenues
are some of the chief hurdles for digital banks.
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