Analyses Et Synthèses
No 113 - 2020 Analyses et synthèses Neobanks seeking profitability Neobanks: stakeholders seeking profitability 2 Neobanks seeking profitability Study carried out by the Research and risk analysis Directorate and the FinTech Unit of the Autorité de Contrôle Prudentiel et de Résolution1 Keywords: bank, neobank, digitalisation, innovation, Fintech, remote identity verification, digital platforms JEL codes: G18, G21, G28 1 Authors : Laurent CLERC, Arthur MORAGLIA, Sylvain PERRON. Contact person: laurent.clerc2@banque- france.fr Neobanks: stakeholders seeking profitability 3 GENERAL OVERVIEW This study follows a first publication by the Autorité de contrôle prudentiel et de résolution in 2018 that was dedicated to the emergence of neobanks2. In particular, it aims at specifying the business models associated with neobanks and focuses on two key aspects: the first one is initial contact with customers, in a context within which the regulatory differences induced by national transpositions of European directives on the stakeholders of this sector which could introduce distortions of competition between national and foreign stakeholders. The second key aspect is profitability: neobanks are often represented as liable to shake up the banking landscape. However, several years after their creation, they still struggle to generate profit margins. In this study, “neobank” refers to all financial stakeholders and intermediaries that offer online banking services or banking services accessible through mobile-only applications. These financial actors are driven by technological progress and by the use of emerging digital technologies. While entry to the banking market is especially difficult due to the competitive edge held by traditional banks, which were able to draw on their experience and reputation to build customer loyalty, these new stakeholders have succeeded in establishing themselves in the market in a lasting manner, sometimes achieving spectacular growth in terms of customer numbers.
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