European Venture Capital investments for the growth of Fintech services exceeded 5 billion in 2018, over 6 billion in 2019 and with an additional increase planned for 2020.
These services mainly include the challenger banks, banks adapted for smartphones, which combine a free ‘light account’ with a mobile payment system.
According to a research published in 2019 by ATKearney, neobanks are proud to serve about 15 million customers in Europe, a number that according to the same research could reach 85 million by 2023.
Additionally, the European Union, through initiatives such as the PSD2, directive on digital payments, is pushing for a change in the market.
The billion-dollar ranks achieved by some of these companies and market research demonstrate exponential growth. However, at Mapendo, we didn’t stop at simple data on current dimensions and market risks, we asked ourselves other questions, simple at first glance, but not trivial.
Is the neobank phenomenon just one of many trends driven by a million-dollar investment in venture capital or there’s a real use by users following the numbers of new activations?
Traditional banks, in response to their ‘digital cousins’, have in turn created light checking accounts, but what is the performance of these products comparable to industry giants like Revolut, Monese, and N26?
In response to the issues raised, Mapendo’s data team measured the real growth potential of B2C digital services in Italy, developing research on two parameters: the actual interest of the public and the use of the products.
The Growth Index was born from the two parameters. It’s a ranking striving to quantitatively show the growth and appreciation of these Fintech services.
The index consists of four values:
- User reviews: Measure of the appreciation shown by users via ratings and reviews. Through this scope, we try to evaluate the user’s experience, which distinguishes Fintech banks from traditional counterparts, as well as creating a fundamental element of diversification among themselves.
- Website ranking: Measures the public’s interest expressed in the amount of traffic/visitors to websites and in the number of searches made on search engines.
- Apps for iOS and Apps for Android: Measure the performance of applications on iOS and Android platforms. The apps are the access points for these banking services and to also measure how much the latter is actually widespread. We have measured the growth in terms of downloads and rankings in the Finance category of the app stores. We note that the breakdown of the analysis is divided into two operating systems iOS and Android. It serves to give more space to those who have chosen to be present only in one of the two ecosystems with regard to the decomposed classification, instead of being penalized within the general classification.
Below is the Growth Index in Italy updated to 10 December 2019.
Following, the ranking of the top 3 performers for each of the 4 parameters taken into consideration (User Reviews, Website Traffic, iOS App, Android App).
The Growth Index is calculated on the basis of the growth of neobanking services obtained from the last three months worth data. It is therefore not surprising to find in the top positions, new products who have just recently entered the market. To these banks, trying to get a good user base results in an increase in spending and growth. The top-ranked companies are in fact occupied by companies that have collected hundreds of millions of investments from venture capital funds.
As for traditional banks, the digital services offered are not found among the top rankings in the Growth Index. However, looking in more details, the results do not seem poor, especially if one focuses on specific parameters. This adds even more value, as it may make sense to assume that these products receive less advertising investment for growth. We must point out, for example, the performance of buddybank, Unicredit’s app bank, ranked first among iOS apps.
Thus, while it’s valid to speak of competition between the market’s new entries and the digital response of companies that have been present longer, the race has still no absolute winner.
Finally, if the integration of the European market leads to an inevitable greater presence of players from other EU countries, Italian companies do not lose their ground. The latter, indeed, show significant success on the national market as we can notice from the results of Tinaba, 3rd for user reviews and 2nd in Android app, and Banca Widiba, 6th overall on 23).
In the sentiment analysis expressed in the rankings and reviews, we can note how the interface and the user experience are the most appreciated (or contested) features by users.
The review “system”, to which e-commerce sites, restaurants, and hotels have educated us, has truly expanded: the number of reviews written by users. This includes banking services, which often can accumulate more online comments than a famous restaurant!
Where there are comments and user-generated content, the listening skills of these companies is crucial in order to have a successful product/service.
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The analysis is based on public data that the Mapendo Data Science team extracted from various sources, including App Annie, Play Store, App Store, Trustpilot, and SimilarWeb.
Website visitor data takes into account, to the extent possible, traffic originating exclusively from Italy.
Mapendo’s artificial intelligence solution creates the most effective User Acquisition funnels in the Fintech, Travel and E-commerce sectors.
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