Biggest neobanks in Europe

A neobank is a type of digital bank that has no physical branches and exists solely in an online format. These banks offer traditional banking services such as account opening, transfers, and card issuance, but do so entirely through mobile apps and web platforms. Here are the main aspects that characterise neobanks:

1. Digitalisation: Neobanks operate entirely in the digital space, allowing customers to manage their finances through a mobile app or website.
2. Low fees and high availability: With no physical branches and lower operating costs, neobanks often offer lower fees and more favourable terms than traditional banks.
3. Usability: Neobanks focus on providing a user-friendly and intuitive user interface. They endeavour to simplify banking operations and make them easier to understand for users.
4. Innovation: Many neobanks offer innovative financial products such as personalised savings plans, automatic investing, integration with other financial services and more.
5. Security: Neobanks take security seriously and often use advanced technologies to protect customer data, such as multifactor authentication, data encryption and biometric technologies.
6. Target audience: Neobanks often target a young audience that is digitally active and values convenience and speed of service.

Neobanks continue to gain popularity due to their ability to offer convenient, fast and innovative financial services. They are changing the traditional view of banking and creating new opportunities for customers around the world.

Neobanks represent a new era in financial services, offering a number of advantages over traditional banks. These advantages make them an attractive choice for many customers, especially those who value convenience, innovation and efficiency. Here are the main advantages of neobanks:

1. Convenience and accessibility: Neobanks offer 24/7 services through mobile apps and web platforms. This means that customers can fulfil their financial transactions anytime and anywhere without visiting physical branches.
2. Low or no fees: The lack of physical branches and reduced operational costs allow non-banks to offer services with low or no fees. This may include lower fees for account maintenance, transfers and other transactions.
3. Fast account opening and management: The process of opening a neobank account often takes only a few minutes and can be done entirely online. Account management is also simplified through intuitive interfaces.
4. Innovative financial products: Non-banks are often at the forefront of innovation, offering products and services that may not be available from traditional banks. This can include unique savings instruments, investment platforms, cryptocurrency services and more.
5. Personalised approach: Non-banks often use data to provide personalised advice and tips on managing finances, which can help customers take better control of their money and achieve financial goals.
6. High level of security: Using the latest encryption and security technologies, neobanks offer a high level of protection for customer data and funds. This may include multi-factor authentication, biometric verification and continuous monitoring to prevent fraud.
7. Focus on customer experience: Non-banks strive to offer an exceptional customer experience by focusing on design, usability and quality of service. This means that customers often have a faster and more enjoyable experience compared to traditional banks.

Neobanks continue to evolve and offer more unique and attractive options for today's users. Their advantages make them an attractive choice for those looking for more convenient, cost-effective and innovative financial solutions.

In Europe, the country with the largest number of neobanks is the UK. London is often referred to as the fintech capital of Europe and is where many well-known neobanks such as Revolut, Monzo and Starling Bank have emerged and developed. The region is favourable for fintech development due to innovation-supportive legislation, a large pool of tech and finance talent, and an active capital market. The UK attracts startups from all over the world, offering them a favourable environment for growth and development.

Lithuania is also a prominent player in the European fintech space and has a significant number of neobanks. The country has become an attractive destination for fintech companies due to its progressive regulation, innovative government and ambition to become the leading fintech centre in the region. Lithuania offers simplified licensing procedures for banks and e-money institutions, making it attractive to neobanks and other fintech startups looking to operate in the European Union. The Bank of Lithuania has introduced a special "regulated sandbox" that allows new fintech companies to test their products and services in a controlled environment before fully entering the market. This not only lowers barriers to entry for new players, but also promotes innovation in the financial sector. In addition, Lithuania attracts foreign fintech companies due to its strategic location, skilled professionals and relatively low operating costs. As a result, the country has become one of the leading fintech centres in Europe, attracting neobanks and other innovative financial start-ups from around the world.

At the time of my last update in April 2023, the largest neobank in Europe was considered to be Revolut. Founded in 2015 in London, Revolut has rapidly expanded to become one of the most recognisable and widely used neobanks in the world. The company offers a wide range of financial services including bank accounts, commission-free currency exchange, cryptocurrency transactions, insurance and other products.

Revolut stands out for its innovative features, global reach and constant endeavour to expand its product and service offerings. This has attracted millions of users worldwide and made it one of the most valuable and fastest growing fintech startups in Europe.

The first neobank in Europe to start offering its services was Simple. Founded in 2009, Simple was one of the first banks to completely abandon physical branches and offer a fully digital banking experience. Although Simple was founded in the US, it was also a significant event for the European market, as it laid the foundations for the future development of neobanks around the world, including Europe.

In Europe, one of the pioneers in neobanking was Germany's Fidor Bank, founded in 2009. Fidor was one of the first in the region to offer fully digital banking services and focused on integration with fintech services and public outreach to customers through online communities.

These early neobanks played a key role in the development of digital banking and shaping the neobanking market as we know it today.

Wise (formerly known as TransferWise) is known for its extensive offering of currency services. Starting as a money transfer service, Wise has expanded its services to become one of the leading platforms for international financial transactions, offering one of the broadest currency options among non-banks and fintech platforms.

Unlike traditional banks and many other neobanks, Wise allows users to hold and exchange money in 50+ currencies, offering competitive exchange rates and transparent fees. This makes it particularly popular with international travellers, expats and businesses dealing with multiple currencies.

In addition to the ability to hold and exchange multiple currencies, Wise also offers feature-rich bank accounts, debit cards, international transfer capabilities and currency risk management tools. The platform is constantly evolving in an effort to improve the accessibility and efficiency of cross-border financial transactions for its users around the world.

Determining which neobank offers the best exchange rate can be difficult, as it often depends on many factors, including currency pairs, transaction size and transaction time. However, some neobanks and fintech platforms are known for their competitive rates and low fees:

1. Revolut: Often offers some of the most competitive exchange rates, especially for major currencies. They offer exchange at the real rate without markup during business hours, although some transactions may incur small fees on weekends as well.
2. Wise (TransferWise): Known for its transparent and competitive exchange rates. Wise offers currency exchange at the average market rate, which is often more favourable than traditional banks and many other services. Commissions are known in advance and shown before the transaction.
3. N26: This neo-bank also offers currency exchange services, especially favourable for European currencies. For debit card transactions abroad, N26 does not usually charge additional fees.

When choosing a neo-bank for currency exchange, it is advisable to consider not only exchange rates, but also other factors such as transaction fees, speed of transaction processing and overall user experience. In addition, exchange rates can change constantly, so it is always a good idea to check the current conditions immediately before making a transaction.

Most neobanks offer free account opening, which is one of their key advantages over traditional banks. Here are some popular non-banks that typically do not charge a fee to open an account:

1. Revolut: This unbank offers free standard account opening, although fees may apply for some additional services and premium accounts.
2. N26: N26 offers easy and fast online account opening with no fees, although monthly fees may apply for more advanced accounts with additional features.
3. Monzo: Users can open an account with Monzo for free and use basic banking services at no extra cost.
4. Starling Bank: This neobank also offers free account opening and management through a mobile app.

Please note that terms and offers are subject to change and some additional services or premium accounts may incur fees. It is always a good idea to check the latest information on the official websites of neobanks or their applications before opening an account.

The first neobank in Europe is Atom Bank, which was founded in 2014 in the UK. Atom Bank was the first fully digital bank in Europe, offering a wide range of banking services exclusively through a mobile app without physical branches. The launch of Atom Bank marked the beginning of the neo-banking era in Europe, which was followed by the creation of many other digital banks and fintech startups offering innovative financial services.

Opening an account with a European neobank is usually a quick and convenient process that is done online via the neobank's mobile app or website. Here are the basic steps to open an account:

1. Choosing a neobank: First of all, you need to choose the neobank that best suits your needs. Consider factors such as available services, fees, user reviews and security.
2. Download the app or visit the website: After selecting a neobank, download its mobile app from the App Store or Google Play, or visit the official website to start the registration process.
3. Registration: Fill out the registration form with your personal details such as first name, last name, date of birth, residential address and contact information.
4. Proof of Identity: To comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements, you will need to provide proof of your identity and address. This could be a passport, national ID card or driving licence. Some neobanks allow you to complete this process online using video identification or uploading photos of documents.
5. Completion of registration: After verification of the provided data and approval of your application, the unbank will activate your account. You will be able to access your account via mobile app or web interface.
6. Top up your account: Once your account is activated, you can top up your account using a bank transfer, card from another bank or other available top-up methods.
7. Account Usage: After funding your account, you can start using all available neobank services such as money transfers, bill payments, card management and more.

It is important to note that the account opening process may vary slightly depending on the particular neobank and the legal requirements of the country in which it is registered. Always read the terms of service and privacy policy carefully before opening an account.

Customer identification in European neobanks takes place
in accordance with international and national anti-money laundering (AML) regulations and Know Your Customer (KYC) requirements. These procedures are aimed at preventing financial crime and securing financial transactions. Here are the main steps of the identification process:

1. Providing personal data: In the first step, the client is required to fill in a form with personal data, including full name, date of birth, residential address and contact details.
2. Proof of identity: The client must provide proof of identity. This can be a passport, national identity card or driving licence. Some non-banks may also ask for proof of residential address, such as a utility bill or bank statement.
3. Verification via mobile app or website: Most neobanks use digital technology to verify a customer's documents and identity. This may include:

1. • Document photography: The client takes photos of their documents via a mobile app or webcam.
   • Biometric verification: In some cases, biometrics, such as facial or fingerprint scans, may be used for additional verification.
   • Video identification: The client has a short video meeting with a neobank representative, during which he or she presents documents in front of a camera.

1. Data verification: Once the necessary information is collected, the unbanker verifies the data provided by using various databases and systems to authenticate the documents and client information.
2. Account activation: After successful verification of the client's identity and documents, the neobank will activate the account and the client can start using banking services.

The identification process at neobanks is designed to make account opening as simple as possible, while maintaining high security standards and regulatory compliance.

Ordering and obtaining a credit card from a European neobank is usually a simple and convenient process that is done online via the neobank's mobile app or website. Here are the basic steps to follow:

Step 1: Opening an account with a neobank

Before ordering a credit card, you need to open an account with your chosen neobank. This involves the registration and identification procedure I mentioned earlier.

Step 2: Applying for a credit card

After opening an account and verifying your identity, you can apply for a credit card through the mobile app or the neobank's website. The application usually requires you to specify your desired credit limit and provide information about your income and employment to assess your creditworthiness.

Step 3: Waiting for approval

The neobank will review your application, which may include checking your credit history and assessing your ability to repay the loan. The time to process your application may vary from one neobank to another.

Step 4: Receive the card

Once your application is approved, the neobank will produce a credit card and send it to you by post to the address you provided when you registered. In some cases, neobanks also offer the option of using a virtual card, which can be added to your mobile wallet and used for contactless payments.

Step 5: Activating the card

Once you have received your card, you will need to activate it by following the neobank's instructions. This may involve entering a unique activation code in the mobile application or confirming the activation via SMS or phone call to the support service.

Step 6: Using the card

Once activated, you can start using your credit card to make purchases and pay for services both online and in regular shops.

It is important to remember that credit card terms and conditions, including interest rates, fees and limits, can vary significantly from one bank to another. Before applying for a credit card, it is important to read these terms and conditions carefully and make sure they meet your financial needs and capabilities.

Maximum credit card limits at European non-banks can vary significantly depending on a variety of factors, including the policies of the individual non-bank, the applicant's credit history and income, and other credit assessment criteria. Unlike traditional banks, non-banks often use innovative approaches to assess credit risk and may offer more flexible credit terms.

General aspects of determining limits:

• Credit History: One of the key factors that affect the maximum credit card limit is the applicant's credit history. People with a good credit history can usually expect higher limits.
• Income: Your monthly or annual income is also important in determining your credit card limit. Non-banks may ask for proof of income to assess your ability to repay the loan.
• Interaction with neobank: Higher limits may be set for existing neobank customers who actively use its services and make timely payments.
• Personalised assessment: Non-banks often use machine learning algorithms and big data to assess creditworthiness, allowing them to personalise offers, including setting credit limits.

Approximate figures:

Although exact figures may vary, maximum credit card limits at European neobanks can range from a few hundred to several tens of thousands of euros. For example, for new customers without a significant credit history, limits can start from €500 to €2,000, while customers with a good credit history and a proven high income can get limits of €10,000 or more.

It's important to remember:

Before applying for a credit card from neobank, it is important to carefully review all terms and conditions, including interest rates, service fees and limits. It is also recommended to read other customers' testimonials and independent reviews to get an idea of the reliability and quality of neobank's services.

Opening a business account with a European neobank is a process that usually takes place online and is designed to simplify banking for entrepreneurs, startups and SMEs. Here are the steps you need to take to open a business account with a neobank:

Step 1: Research on neobanks

• Explore different neobanks offering business accounts in Europe and compare their services, rates, fees and customer reviews.
• Make sure the chosen neobank fits your business needs and offers the features you need, such as international transfers, integration with accounting software and corporate cards.

Step 2: Preparing the necessary documents

• Prepare all necessary documents for your business, which may include:

• • Constituent documents of the company (e.g. certificate of incorporation, articles of association).
  • Documents proving the identity and address of the business owners and authorised persons.
  • A description of your business operations and planned financial transactions.

Step 3: Online registration

• Visit the official website or download the mobile app of your chosen neobank.
• Complete the online registration form with your business information and personal details of authorised persons.
• Upload the required documents as per neobank requirements.

Step 4: Verification process

• Neobank will verify the documents provided and may request additional information or documents to complete the identification process in accordance with KYC and AML regulations.
• In some cases, a video call may be required for final verification of the identity of the business owner or authorised person.

Step 5: Account Activation

• Upon successful verification, the neobank will activate your business account and you will have access to account management via the online interface or mobile app.
• You can also order corporate cards for employees, if this is provided by the neobank services.

Step 6: Using the account

• Start using your business account to manage your business finances, including making payments, managing corporate cards and tracking transactions.

It is important to remember that the requirements for opening a business account may differ depending on the neobank and the jurisdiction in which it is registered. Therefore, always read the terms and conditions and requirements of the neobank carefully before starting registration.

Yes, in Europe, many neobanks offer credit options including personal loans, lines of credit and other financial products. Neobanks use digital technology to simplify the application process and speed up the loan approval process. However, loan terms and conditions, such as maximum amounts, interest rates, and creditworthiness requirements, can vary significantly from one neobank to another. It is important to carefully review these terms and conditions and possibly compare offers from different neobanks before deciding to apply for a loan.

The UK is home to the largest number of neobanks in Europe, due in part to its advanced financial infrastructure and favourable regulatory climate for fintech innovation. This has been made possible by strong support from regulators such as the Bank of England and the Financial Conduct Authority (FCA), which have created a favourable environment for the growth and development of neobanks. In addition, London, as one of the world's leading financial centres, provides an ideal breeding ground for financial technology start-ups and investments.

In terms of the European Union country with the largest number of neobanks, while specific data may vary, Germany is often cited as the leader in this area among EU countries, following the UK at a pan-European level. Germany is home to several leading neobanks, such as N26, which are widely recognised and have a user base around the world. This is due to the country's strong economy, high level of digitalisation and innovation culture, as well as strong government support for digital and fintech ventures.

Both these markets - the UK and Germany - are key players in the European fintech space, attracting investors and entrepreneurs due to their openness to innovation, strong infrastructure and favourable regulatory climate.

Lithuania deserves special attention in the context of the European neo-banking market due to its active role in attracting fintech companies and innovative banking services. The country has become one of the leading fintech centres in the European Union, partly due to its strategic policies and regulatory initiatives aimed at creating a favourable environment for the development of fintech enterprises.

One of Lithuania's key advantages is its progressive regulatory environment, including a flexible licensing system for banks and e-money, which makes it easier for new players to enter the financial market. The Lithuanian Bank actively promotes the development of the fintech sector by offering innovative solutions, such as simplified procedures for obtaining licences and the creation of a dedicated fintech sandbox that allows companies to test their products and services in a controlled environment prior to full market launch.

These efforts have led to a significant increase in the number of neobanks and other fintech companies choosing Lithuania as their jurisdiction to do business. The country has attracted many international fintech companies seeking to use the Lithuanian market as a gateway to the European Union, especially after Brexit, when companies started looking for alternative ways to access the European single market.

Thus, Lithuania has successfully established itself on the map of Europe as one of the key fintech hubs, offering attractive conditions for the development and scaling of innovative financial services.

European neobanks offer a wide range of financial services, which may vary significantly from one neobank to another, but there are a number of common features and services that characterise most of them:

1. Opening and maintaining accounts: Quick and convenient online opening of current and savings accounts without the need to visit a branch.
2. Debit and credit cards: Issue virtual and physical cards, often with unique benefits such as cashback on purchases or no fees for use abroad.
3. Transfers and payments: Instant home and international transfers, including SEPA support in Europe, often with no or very low fees.
4. Financial Management: Advanced tools for managing personal finances, including categorising expenses, setting budgets, tracking spending and savings.
5. Investments and Savings: Investment opportunities including stocks, bonds, ETFs and other financial instruments, as well as a variety of savings account options with competitive interest rates.
6. Loans and credit lines: Offers consumer loans, overdrafts and credit lines with transparent terms and competitive rates.
7. Insurance: Often include a variety of insurance products such as travel, health, life and mobile phone insurance available directly through the app.
8. Cryptocurrencies: Some neobanks offer services to buy, store and sell cryptocurrencies directly through their platforms.
9. Multiple currency support: The ability to hold accounts in multiple currencies is particularly useful for travellers or those dealing with foreign counterparties.
10. Customer support: Modern customer communication channels including in-app chats, social media and video calls to ensure fast and efficient support.

These features make European neobanks an attractive choice for consumers looking for more convenient, flexible and innovative financial services than traditional banks.

Monthly account fees at European neobanks can vary considerably depending on the neobank, the type of account and the range of services you choose. Many neobanks offer basic accounts with no monthly fee, which is one of their advantages over traditional banks. However, additional services and premium accounts may have a monthly fee.

Free invoices

• Basic Access: Many neobanks offer basic accounts with no monthly fees, including a debit card, a mobile app to manage the account, free home transfers and sometimes a certain number of free international transfers.

Paid accounts

• Premium Accounts: Premium accounts with monthly fees of €5 to €30 or more may be required to access advanced features such as higher limits on commission-free transactions abroad, higher interest rates on savings, travel insurance and access to exclusive offers.

Personalised services

• Additional Services: Certain services such as card replacement, express card delivery or access to specialised investment products may incur additional charges regardless of account type.

Exemptions and discounts

• Some neobanks offer discounts or complete exemption from monthly fees for students, young people or as part of special promotions.

It's important to remember

Before opening an account, it is important to familiarise yourself with the fees and terms and conditions of a particular neo-bank, as they may change. It is also worth considering that some services that traditional banks may provide free of charge or for a small fee may be charged for in non-banks and vice versa.