Volume 4, issue 6, 2025
46
NEOBANKS: A GLOBAL TREND AND PROSPECTS FOR COUNTRIES WITH
DEVELOPING FINANCIAL INFRASTRUCTURE
Abdurakhimova Dilora Karimovna
Associate professor of TSUE, DSc
ABSTRACT:
This paper explores the rise of neobanks—digital-only financial institutions—as a
significant global trend in the evolution of banking services. The analysis highlights their
advantages and limitations, particularly in the context of countries with developing financial
infrastructure. Special focus is given to the potential role of neobanks in enhancing financial
inclusion and accelerating digital transformation in Uzbekistan.
Keywords:
neobank, digital banking, fintech, financial inclusion, Uzbekistan, developing
countries.
INTRODUCTION
The global financial industry is undergoing rapid transformation driven by digital innovation.
One of the most prominent trends is the rise of neobanks—fully digital, branchless banks
offering low-cost, technology-driven financial services. In developed markets, neobanks such as
Monzo (UK), Revolut (UK/EU), and Tinkoff (Russia) have disrupted traditional banking by
providing user-centric platforms, low fees, instant money transfers, and enhanced customer
experience. This study explores the key operational models of these neobanks and evaluates their
adaptability and potential in emerging economies, particularly in Central Asia (CA).
The emergence of neobanks—digital-only financial institutions without physical branches—has
significantly reshaped the global banking landscape. These fintech-driven entities leverage
advanced technologies such as artificial intelligence, cloud computing, and mobile platforms to
provide seamless and cost-effective financial services.
Zalan and Toufaily (2017) examine the business model of neobanks, arguing that their customer-
centric design, agile structure, and low operational costs make them highly competitive
compared to traditional banks. The authors highlight how mobile-first strategies and open APIs
create tailored financial experiences.
Gimpel, Rau, and Röglinger (2018) analyze the digital maturity of banking institutions and
suggest that neobanks are not just disruptors but also innovation catalysts for incumbent banks.
Their research shows that customer trust and data security are still key concerns for the long-
term viability of digital-only banks.
PwC Global FinTech Report (2021) emphasizes the global rise of digital banking, with neobanks
playing a major role in increasing financial inclusion, especially among the unbanked and
underbanked populations. The report points out that regions such as Southeast Asia, Latin
America, and Africa are particularly fertile for neobank growth due to high smartphone
penetration and underserved financial systems.
Claessens and Rojas-Suarez (2020) focus on developing economies, underlining that neobanks
can act as powerful tools for extending financial infrastructure to rural and informal sectors.
However, they stress the importance of supportive regulatory environments and digital literacy
programs.
Chishti and Barberis (2016), in their foundational work The FINTECH Book, explore how
neobanks challenge traditional banking norms through lean operations, cloud-based
infrastructure, and behavioral analytics. They stress the role of open banking in enabling these
innovations.
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Accenture (2022) presents a case study-based analysis of the sustainability of neobanks,
concluding that while funding and customer acquisition are strong in early stages, profitability
remains a challenge. Nevertheless, digital-first economies with developing infrastructures are
positioned to benefit from neobank adoption, provided regulatory and technological gaps are
addressed.
Collectively, these studies affirm that while neobanks have introduced radical innovations in the
financial sector, their success in countries with developing infrastructure depends on factors such
as regulation, trust-building, digital infrastructure, and user education. The literature highlights
both the promise and the risks of scaling neobanks globally.
METHODS
This qualitative study uses comparative analysis based on:
Public financial reports (2022–2023),
Product portfolios,
User growth metrics,
Digital adoption indicators from World Bank and Statista,
Case analysis of CA region (Uzbekistan, Kazakhstan, Kyrgyzstan) based on available
financial infrastructure indicators and regulatory frameworks.
RESULTS
Over the past half-decade, neobanks—digital-only banks without physical branches—have
emerged as powerful disruptors in the global financial ecosystem. Driven by technological
advancements, regulatory support, and changing customer expectations, neobanks have
experienced rapid growth in user adoption, investment inflows, and product diversification.
Between 2018 and 2024, the number of active neobanks worldwide grew from fewer than 100 to
over 400, with customer bases exceeding 1 billion globally. Key markets include:
Europe (especially the UK with Monzo, Revolut, Starling Bank)
Latin America (Brazil’s Nubank became one of the world’s largest digital banks)
Asia-Pacific (India’s Paytm Payments Bank, South Korea’s KakaoBank)
USA (Chime, Varo Bank)
Neobanks have attracted substantial venture capital:
Between 2019 and 2021, global funding exceeded $10 billion.
Despite a slowdown in 2022–2023 due to macroeconomic headwinds, strong players
continued raising funds for international expansion and profitability improvements. The
following graphs illustrate current trends in neobank usage in countries with different levels of
financial infrastructure development:
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Figure 1. Number of neobank users (in millions)
It is illustrated number of neobank users in the Figure 1. The UK (27 million) and the US (23
million) lead in terms of user numbers. Brazil and India are showing strong adoption, with 18
and 14 million respectively.
Uzbekistan (0.8 million, not listed) is lagging behind, reflecting the early stages of digitalisation
and low penetration.
Initially focused on basic services (e.g., current accounts, money transfers), neobanks now offer:
Personal and business loans
Investment tools
Buy Now Pay Later (BNPL) services
Crypto and savings accounts
Budgeting tools driven by AI
While regulators initially welcomed neobanks to foster competition, recent concerns about
compliance and risk management have increased scrutiny:
Some neobanks (e.g., N26 in Germany) faced restrictions.
Traditional banks have responded with their own digital units or partnerships.
Despite rapid adoption, many neobanks still struggle with profitability due to:
High customer acquisition costs
Low cross-selling rates
Competition from both incumbents and fintechs
However, trends toward embedded finance, open banking, and financial inclusion continue to
position neobanks as central players in the evolving financial landscape.
Monzo and Revolut were both founded in 2015 in the UK, signaling their emergence during the
early wave of neobank expansion. Tinkoff, by contrast, was established much earlier in 2006 in
Russia, positioning it as a pioneer in digital banking in Eastern Europe.
Monzo focuses on traditional banking (current accounts and P2P payments), catering to everyday
users. Revolut has a broader offering, including currency exchange and cryptocurrency services,
emphasizing its global, borderless banking model.Tinkoff operates a more diversified portfolio
including credit, insurance, and lifestyle services, showing a strong fintech-ecosystem approach.
Table 1.
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Comparative Analysis of Monzo, Revolut, and Tinkoff
Feature
Monzo
Revolut
Tinkoff
Founded
2015
2015
2006
Region of Origin
UK
UK (global expansion) Russia
Core Services
Current
accounts,
P2P
Currency
exchange,
crypto
Credit, insurance, lifestyle
services
Revenue Model
Subscription + FX
Freemium, FX, crypto Credit-based
Regulation
FCA (UK licensed
bank)
EMI (UK), e-money
license
Full banking license
Customer
Base
(2023)
~8 million
35+ million
20+ million
Digital
Engagement
High (mobile-first)
Very high (super app
model)
High (AI-based UX)
In the table 1 it is analysed these three neobanks’ activities. Monzo uses a subscription-based and
FX fee model. Revolut adopts a “freemium” model with monetization via FX and crypto services.
Tinkoff relies on a credit-based model, benefiting from interest income.
Monzo is a licensed UK bank regulated by the FCA, offering high trust. Revolut operates under
e-money licenses (EMI), allowing global scalability but with some limitations in banking
functions. Tinkoff has a full banking license in Russia, enabling comprehensive banking
operations.
Revolut leads with 35+ million users worldwide due to its aggressive global expansion. Tinkoff
follows with 20+ million, reflecting a strong domestic presence. Monzo has around 8 million
users, showing more modest but focused UK growth. Revolut stands out with very high
engagement through its super app model. Monzo also scores highly with a mobile-first strategy.
Tinkoff leverages AI-based UX for personalized services, maintaining high user satisfaction.
Each neobank reflects a distinct strategy: Monzo focuses on user simplicity and domestic market
strength. Revolut is aggressively global with diversified fintech services. Tinkoff builds a holistic
financial ecosystem around its users with credit and lifestyle integration.
This diversity illustrates how fintech institutions adapt based on regulatory environments, user
needs, and technological focus.
While Monzo and Revolut rely heavily on lightweight digital models, Tinkoff’s approach is
broader, integrating credit, lifestyle, and e-commerce features. For emerging markets like
Uzbekistan and Kyrgyzstan, where credit card penetration is low but smartphone usage is
growing, a hybrid model similar to Tinkoff, with credit services + digital convenience, may be
more suitable.
Challenges in Central Asia include low trust in financial institutions, limited digital KYC
infrastructure, fragmented payment systems.
However, opportunities include young, tech-savvy populations, government-driven digitalization
programs (e.g., Uzbekistan’s "Digital Uzbekistan 2030"), potential for public-private
partnerships with fintechs.
To succeed, neobanks in CA should focus on simplified onboarding, microcredit and remittance
services, partnership with local telcos and payment providers, regulatory dialogues for fintech
sandboxes.
CONCLUSION
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50
Neobanks represent a significant opportunity for inclusive financial services in developing
economies. While models like Monzo and Revolut emphasize simplicity and currency
management, Tinkoff’s complex ecosystem suggests a stronger fit for markets like Central Asia,
where financial infrastructure is still maturing. Local adaptation, customer education, and
partnerships with regulators will be critical for sustainable adoption.
The key factor for success is not only the availability of technology, but also the level of digital
literacy, trust and readiness to change formats.
Uzbekistan has good prerequisites for scaling FinTech services due to the growth of mobile
infrastructure, especially among young people and entrepreneurs.
Recommendations: support for neobanks at the regulatory level, stimulation of investments in
digital solutions and educational initiatives on financial literacy.
The key factor for success is not only the availability of technology, but also the level of digital
literacy, trust and readiness to change formats.
Uzbekistan has good prerequisites for scaling FinTech services due to the growth of mobile
infrastructure, especially among young people and entrepreneurs.
Recommendation for supports for neobanks at the regulatory level, stimulation of investments in
digital solutions and educational initiatives on financial literacy.
REFERENCES:
1.
Zalan, T., & Toufaily, E. (2017). The Promise of FinTech in Emerging Markets: Not as
Disruptive. Contemporary Economics, 11(4), 415–430.
2.
Gimpel, H., Rau, D., & Röglinger, M. (2018). Understanding FinTech start-ups – a
taxonomy of consumer-oriented service offerings. Electronic Markets, 28, 245–264.
3.
PwC. (2021). Global FinTech Report 2021: Transforming the financial services
landscape.
PricewaterhouseCoopers.
Retrieved
from:
https://www.pwc.com/gx/en/industries/financial-services/publications/global-fintech-report.html
4.
Claessens, S., & Rojas-Suarez, L. (2020). Financial Inclusion: What Have We Learned
So Far? What Do We Have to Learn? Center for Global Development.
5.
Chishti, S., & Barberis, J. (2016). The FINTECH Book: The Financial Technology
Handbook for Investors, Entrepreneurs and Visionaries. Wiley.
6.
Accenture. (2022). The Future of Neobanks: Growth, Profitability and Sustainability.
Accenture Research. Retrieved from:
