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Summary of our market study
Neobanks account for 10% of market share in France
Neobank market trends in France
The neobank market in France is undergoing a phase of significant growth and transformation. With the emergence of online banks accessible via the Internet and smart devices, there has been a shift in the way banking services are consumed by the French public.
More than one in ten people in France have opened an online bank account, and 2% of French people have made neobanks their main banking establishment.
Nevertheless, online banking remains a secondary option for most French people, and a considerable number still rely on traditional banking institutions for their primary financial needs.
Traditional banks in France have not remained passive in the face of this change. They are closing physical branches to cut costs, and developing their own digital offerings to try and compete with these neobanks.
The new banks are not content to simply offer basic banking services, but are seeking to become banks in their own right, diversifying their range to include products such as pension insurance, life insurance and various credit products.
However, it is important to note that a significant proportion of the French population is still reluctant to fully embrace online banking. This reluctance is explained by a preference for personal contact with bank advisors, as well as concerns and distrust of digital technology and the use of bots for communication.
Players in the neobank market
- N26: Originating in Germany, N26 has managed to capture the attention of the French market thanks to its transparent fees and simple account management features.
- Revolut: Major player from the UK.
- Monzo: Also based in the UK, Monzo has been making waves with its distinctive coral-pink cards and customer-centric banking services.
- Starling Bank: With its in-app analytics and business banking options, Starling Bank targets a broad audience.
- Orange Bank: Telecoms giant Orange's foray into banking brings its customer service expertise into the financial arena.
- Hello bank! BNP Paribas' digital bank.
- Compte Nickel, owned by BNP Paribas.
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Summary and extracts
1 Market overview
1.1 INTRODUCTION
A neobank refers to the emergence of new types of banks around the world, mainly online banks accessible via the Internet, on computers and smartphones. They provide simple access to accounts, simplifying transactions and customer interaction. The rise of neobanks is linked to the gradual disappearance of bank branches, insofar as neobanks offer remote banking services, without counters or branches to carry out operations.
Although more and more French people are turning to online banks, they are still often secondary banks, and many still use traditional banks as their main bank. While traditional banks are closing branches and expanding their digital offerings to compete with neobanks, neobanks are adopting a global strategy to become full-service banks, diversifying their product portfolios with provident insurance, life insurance and credit offers.
However, a significant proportion of the population remains reticent about online banks, as they remain attached to their physical banking advisors and have little confidence in "all digital" and the use of bots to communicate.
1.2 THE GLOBAL NEOBANKING MARKET: CURRENT SITUATION
According to Grand View Research, the global neobank market is estimated to be worth $**.** billion in ****. This is a market that is growing exponentially, with an average CAGR estimated at no less than **.*% over the period ****-****. We can therefore make the following estimates for the coming years:
Neo-banking market World, ...
1.3 NEOBANKS ARE BOOMING IN FRANCE
NeoBanques.app estimates that there will be no fewer than ** neo-banks in France by early ****, with ** million users by ****. [***] This represents almost **% of the French population with a neo-bank account. Responding to expectations of immediacy and flexibility, and an appeal for innovative services, neo-banks seem to be widely deployed in the ...
2 Demand analysis
2.1 THE PROFILE OF NEO-BANK CUSTOMERS
A study by Ipsos in collaboration with KPMG reveals a panorama of neo-banking consumers in France in ****.
Breakdown by gender
Neo-banks seem to appeal mainly to men, who are more confident and sensitive to this type of innovative financial service.
Breakdown of neo-bank customers by gender France, ****, in Source: ****
Age ...
2.2 NEO-BANK CUSTOMER EXPECTATIONS
High demand, primarily due to economic advantages...
Among the reasons for the popularity of neo-banking among private individuals are :
an advantage in the price of neo-bank services: free payments in other currencies, cheaper (***) opening of a new account, etc. an advantage in the quality of the services offered: the ability to ...
2.3 B2B, A BUOYANT DEMAND SEGMENT FOR NEO-BANKS
The expectations of SMEs
While many private customers turn to neo-banks for their attractive pricing, they can also attract SMEs, which are sometimes overlooked by traditional banking services. For SMEs, the first criterion is efficiency gains. According to a **** McKinsey study, SMEs spend an average of **% of their time carrying out ...
3 Market structure
3.1 MAIN NEOBANKS IN FRANCE
Of the almost half of French people who have bank accounts with several banks in France, around **% have one or more accounts with online banks, even if it's usually a secondary account. Among the most represented online banks are Boursorama, followed by players such as Hello Bank, according to Capgemini's **** ...
3.2 MARKET CONCENTRATION
In France, online banking is said to account for **% of the market. In reality, * major players continue to dominate the national market: Nickel, N**, Revolut and Orange Bank. Other players in the French market include the UK's Monese, Starling Bank and Wise, as well as the Finnish neobank Holvi, which specializes ...
3.3 A MARKET STILL SEEKING ITS ECONOMIC EQUILIBRIUM
Neo-banks that are rarely profitable...
According to an article in Forbes, only *% of the *** neo-banks in existence worldwide by **** will be profitable. Despite years of existence and numerous fund-raisings, neo-banks are still unable to find a profitable model. Indeed, revenues from the low-cost or even free offers that neo-banks are keen ...
4 Offer analysis
4.1 TYPOLOGY OF NEOBANKS IN FRANCE
Other banks such as Eko, Monabanq, Qonto and Treezor also offer different ranges and products for current accounts and consumer credit.
4.2 Neo-banks, growth drivers for the banking system?
The decline of traditional credit institutions
The French public's waning interest in traditional banking establishments is necessarily leading to a sharp drop in profitability for bank branches, and consequently to the closure or merger of many of them. Over the past ** years, more than *,*** branches have been closed[***].
We can look ...
5 Regulations
5.1 REGULATORY FRAMEWORK FOR NEOBANKS IN FRANCE
Regulations governing the use of "neo-banks
The ACPR reminds us that the use of the term "bank" is regulated in France. Any payment company or fintech cannot be called a "bank" or "neo-bank". To qualify as a bank or neo-bank, a company must have received "credit institution" approval from the ACPR ...
6 Positioning the players
6.1 Segmentation
- Alma
- Lydia
- Nickel
- Hello Bank !
- Memo Bank
- Qonto
- Revolut
- N-26
- Bforbank
- N26
- Mangopay
- Oney
- Ibanfirst
- Pledg (Credit Agricole)
- Orange Bank
List of charts presented in this market study
- Number of establishments registered under code 6419Z
- Online banking secondary among French multi-bankers
- Number of users of leading neo-banks
- Market share of the top 5 neo-banks
- Neo-bank losses
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Latest news
"BNP Paribas' Hello Bank nears one million customers" - 03/07/2024
- Revolut : Over 3 million customers in France
- Hello Bank (BNP Paribas online bank):
- - Over 950,000 customers in France
- - Presence in Germany and Belgium, with a total of 3.4 million customers
- - Benefited from a transfer of customers following the closure of Orange Bank
- . Orange Bank - Has announced its closure.
- - 800,000 customers at the time of the announcement, of whom 500,000 seem eligible for a transfer to Hello Bank
- BoursoBank (Société Générale subsidiary):
- - Has benefited from the agreement with ING, which has left the French market, resulting in the acquisition of at least 315,000 new customers
- - Exceeded the 6-million-customer threshold after the operation
- The major online banks have seen their customer base grow by an average of 5.7% a year over the past three years.
Revolut exceeds 2 billion euros in revenues - 03/07/2024
- In 2023: revenues almost doubled to £1.8 billion (approx. €2.1 billion).
- Profits have risen to £344 million (approx. €395 million), compared with around £6 million in 2022.
- By the end of 2023, Revolut has 45 million customers worldwide, with an increase of 12 million new customers joining the neobank in 2023.
- Number of customers in France: over 3 million.
- Revolut is aiming for 50 million customers by the end of the year.
- Number of employees: over 10,000.
Revolut targets a $40 billion valuation - 24/06/2024
- - Target valuation: Over $40 billion.
- - Revolut creation date: 2015.
- - Number of Revolut customers: Approximately 40 million.
- - Number of Revolut employees: More than 9,000.
- - Customer target in France: 20 million customers.
- - Of its 40 million customers worldwide, a third come from the UK.
- - Revenues in 2022: £922.5 million (+45%)
- - Net profit in 2022: £5.8 million. - Revenue forecast**: £1.7 billion
Lydia invests 100 million euros to become a bank - 15/05/2024
- **Customer target:** 5 million customers in France within three years.
- **Recruiting:** around 400 new employees, almost doubling the current workforce of 250.
- **Since its creation in 2011, Lydia has raised around 235 million euros.
- **Number of current banking customers:** around 2 million, out of a total of 7 million users.
- **Express consumer credit in partnership with Floa (subsidiary of BNP Paribas).
Fintech: Ibanfirst records revenues of €50 million in 2023 - 03/05/2024
- - Ibanfirst sales in 2023: €50 million.
- - Increase in sales in 2023 compared with 2022: 38%.
- - Claimed number of corporate customers across Europe: 10,000.
- - Percentage of revenues from France: approx. 30%.
- - Number of European countries where Ibanfirst operates outside France: nine, Germany, the Netherlands, Belgium, the UK and Romania.
- - Acquisitions made by Ibanfirst: Germany's Forefix and the Netherlands' NBWM in 2019, the UK's Cornhill in 2023, and the UK's Rational FX in 2023.
- - Sales forecast for 2024: €70 million.
- - Revenue target for 2025: 100 million euros. - Employment: 400 employees.
French Tech: Qonto acquires fintech Regate - 07/03/2024
- The Regate start-up, acquired by Qonto, was created in 2020.
- Regate has attracted 10,000 companies in less than four years.
- Regate has raised €27 million, notably from Valar Ventures.
- Qonto has 450,000 customers. Qonto will grow from 1,400 to 1,500 employees following the acquisition.
- Qonto is available in four European countries: France, Germany, Spain and Italy.
- Regate also has 500 customers among chartered accountants.
- Qonto has raised €486 million in 2022.
- Qonto has increased its revenues by 50% in 2023. Qonto acquired German competitor Penta in 2022.
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the neobank market | France
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