Neo and Challenger Bank Customer Base to Grow by 50.6%, Globally, by 2020

PORTLAND, Oregon and PUNE, India, January 23, 2017 /PRNewswire/ --

According to a new report published by Allied Market Research, titled, "Neo and Challenger Bank Market-Global Opportunity Analysis and Industry Forecasts, 2016-2020," the collective customer base of the neo and challenger bank is expected to grow at a CAGR of 50.6% from 2017-2020. Neo and challenger bank market trends are expected to be progressive in coming years. China is expected to witness the highest growth rate during the forecast period, owing to the large pool of underbanked consumers and surge in online and mobile banking users.

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Summary of the Neo and Challenger Bank Market Report can be accessed on the website at: https://www.alliedmarketresearch.com/neo-and-challenger-bank-market

The growth of the neo and challenger bank market is driven by factors such as favorable government regulations, convenience offered to consumers, and higher interest rates than traditional banks. However, acquisition of customers and profitability pose challenges to the market growth. Furthermore, increase in penetration of smartphones and internet in the emerging economies is expected to offer immense opportunities for the market growth in the near future.

"Digital challenger banks are simplifying the financial world, creating a customer centric approach to services, and transforming the way banking is viewed by the public and the market. In return, they endeavor to deliver larger returns on equity as compared to those offered by prominent traditional banks. They strive to offer greater flexibility when it comes to lending through streamlined operations and costs." states Sheetanshu Upadhyay, BFSI Research at Allied Market Research.

The neo and challenger bank market is segmented based on the type of bank into neo and challenger banks. Among these, the neo banks segment accounts for the largest customer base in 2016, owing to the prominence of these banks in U.S. and the ease in acquisition of customers. This segment is expected to grow at a notable CAGR of 49.7% during the forecast period. The challenger banks segment is expected to grow at a CAGR of 52.6% in terms of customer base because of the proliferation of these banks in regions such as UK, Germany, and China. This is attributed to favorable regulations and substantial investments for these startups. Furthermore, increase in launch of digital subsidiaries by traditional banks and a large customer base available with them are expected to promote the growth of the market.