Everything transform. Digitization has been marking the investment of banks for years and the birth of other purely digital ones, which have gone from being an alternative to just another option. In fact, they scratch clients from traditional entities with a commitment to lower commissions and incentives to the client, especially when remunerating savings. Also for their comfort and transparency, they defend from the sector.
According to the consulting firm Inmark, in 2020 9% were clients of a neobank, those who act exclusively or almost on the Internet. Today they are 15.9%. “There is a change in trend towards neobanks, driven by lower commissions and incentives. It makes it more attractive for all segments of the population, not just for young people”, says Ana Delia Revilla, director of multi-client studies at the Inmark group.
“We are growing faster and faster,” says Ignacio Zunzunegui, head of Revolut in Spain and expansion in southern Europe. It is the most powerful in the ecosystem, with almost two million users. It wants to be a “financial superapp with the bank at the center”. That allows you to invest, save, finance yourself, manage trips… “It makes it much easier to manage money.” The commissions are a hook because they do not support a large structure of personnel or branches. “Without such high fixed costs, we can have very attractive and competitive prices without impacting profitability,” he says.
Usability is another point in favor. The premise is to have all the services and product offerings without leaving the phone or PC screen. “We are simpler, cheaper and faster, with the same regulation and security,” says Pablo Reboiro, general director of N26 for Spain and Portugal. Hand in hand with greater transparency, which is mandatory: “As they do not have physical offices, they offer all the information, including the fine print, on their website or app,” says Andrea Morales, from the HelpMyCash comparator.
Instead of so many entry fees, if you want more benefits you can go to measure. They use subscription models, like Spotify. “People are no longer willing to pay for services they don’t need or accept hidden commissions,” Reboiro says. In exchange for a monthly fee there are advantages such as reimbursement of expenses (cashback), free investments, travel improvements, extended ATM withdrawals or insurance. “You access a universe of advantages,” says Zunzunegui.
Paying for savings is the other key factor. After years of low rates and banks saving payments, offers have been spreading for months among digital banks. Revolut announces a “flexible account” with a return of up to 3.7% IRR – not guaranteed – with monetary funds. N26 has a remunerated account at 2.26% TAE, and Orange Bank, a savings account at 1.8% TAE. In deposits, Openbank offers up to 3.07% TIN for six months. “The big banks are not transferring the rise in rates to the remuneration of savings. We are the ones that began to offer attractive remunerations above 2%”, highlights Reboiro. The formula helps N26 to grow more than 50% month-on-month in customer acquisition, with 950,000 today.
The market has been divided between native digital projects –Revolut, N26– and those linked to traditional entities, such as Imagin (CaixaBank), Openbank (Santander) or EVO (Bankinter). The latter can call more conservative clients: “Association with traditional banks gives them security, knowing that they have a large bank as their backing,” they say in HelpMyCash. The appeal of digital means that savers go from concentrating everything in one entity to multiplying. Inmark data indicates that 49.4% of customers are from various entities. By the way, they cover some weak point, such as the lack of credit cards or their own ATMs, which entails costs if withdrawals are very common.
The pull goes beyond the young. “In the beginning, the discharges were from the 25-34 year-old group. Then they grew above, between 18 and 24, more than 60…”, they point out in Revolut. “70% of our clients are between 25 and 50 years old, we attract a wide audience,” they say in N26.
