August 28, 2019
At the turn of the millennium, in 1999, movie theaters around the world witnessed the release of the massive box-office success The Matrix. A revolutionary movie for its time, it featured a protagonist named 'Neo,' who was the savior of a world caught in crisis. Leveraging advanced technology, he was able to alter the very fundamentals of his environment. Something not dissimilar has occurred in the financial services industry.
Fast-forward to 2016: a new breed of technology-driven and customer-centric financial institutions, aptly named 'neobanks,' are working to transform the banking landscape as we know it. MEDICI's new report on neobanking takes a deep-dive into this fascinating and rapidly-growing segment, offering a comprehensive analysis of the subject from various angles.
To provide some context: after the financial crisis of 2008–09, the banking sector, especially in the developed markets, suffered a heavy loss of trust and is undergoing incremental reform ever since. Legacy technology systems and processes remain, to this day, a constant for most banks globally, and it would seem that they remain hesitant to embrace change. High penalties of non-compliance, competition from tech giants penetrating the financial services market, the pressure of running physical branches in a digital era, and challenges surrounding consumer engagement have further put more pressure on the incumbent banks. Simultaneously, traditional banks have been increasingly competing with FinTech players ...