Written by: Naim Alame, Financial Services Payments Lead, Middle East; Giorgio Flori, Managing Director – UAE Financial Services Portfolio lead; and Masa Al Chalabi, Financial Services Senior Manager – Middle East
Neobanks are multiplying rapidly and they offer incredible opportunities to disrupt the financial services market. Accenture’s Global Banking Industry Outlook estimates that in 2020, 20% of all players in the banking and payments sectors were less than 15 years old. But not all neobanks will become profitable, or survive past the startup stage. The rush to market often has founders and CEOs hurrying through the detailed business planning that these businesses need to become market leaders. This series of posts will examine all stages of the neobank life cycle, including how to help envision, build and establish a successful neobank.
We begin by looking at some unique dilemmas that neobanks face. These are matters that should be addressed before a single account is opened. Careful planning and a bold vision that goes beyond customer acquisition are essential for a profitable and sustainable banking business. The three dilemmas discussed here are faced by every new neobank, and striking the right balance can help pave the way to success.
Facing these dilemmas and choosing a path that is both profitable and sustainable begins with understanding your purpose—why you want to create a neobank. Then, with that purpose in mind, you can plan for the entire life cycle of the neobank, from envisioning your product, to designing it, building it, running it and eventually either scaling up or executing your exit plan.