Neobanking Revenue: How to Differentiate in a Crowded Market

08/08/22 • 38 min

In this episode, we explore what the future holds for neobanks, with so few currently profitable in the face of a current economic downturn. We’ll discuss the challenges of setting business strategies over the next couple of years, answering key questions such as whether neobanks should pursue growth at the expense of unit economics, how they can continue to differentiate their revenue streams from one another, and ultimately what they should do as rising rates pressure investors to stay clear of potentially “riskier” assets.

Neobanking Revenue: How to Differentiate in a Crowded Market

Timestamps:
- Neobanking revenue: How do you differentiate in a crowded market? (3:21)
- Where are we right now with Neobanks? And how healthy are they? (6:08)
- VC funding: How will this play out with regards to Neobanks vs Fintech in general (10:17)
- Examples of Neobanks diversifying revenue & BaaS (17:15)
- Subscription based revenue: Does it work globally? And how will it impact the revenue of Neobanks? (21:50)
- Does becoming a licensed bank slow down the creation and shipping of products? (23:42)
- Embedded vs standalone banking in the future (28:55)
- How should we bank with a Neobank? (33:53)

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You can find Adam Davis here
You can find Jeff Tijssen here
You can find Nik Milanović here
You can find Valentina Kristensen here

Sources cited:

Neobanking Revenue: How to Differentiate in a Crowded Market

Please subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!

You can find Adam Davis here
You can find Jeff Tijssen here
You can find Nik Milanović here
You can find Valentina Kristensen here

Sources cited:

Previous Episode

Embedded Finance: What Does It Take to Prosper in the New Value Chain?

In this episode of Deciphered, Adam Davis, Associate Partner at Bain & Company and Jeff Tijssen, Global Head of Fintech, Bain & Company, are joined by Matt Harris, Partner, Bain Capital, and Sophie Guibaud, Co-founder & CCO of Fiat Republic, to discuss embedded finance marking a new era in how consumers and businesses build and manage relationships with financial services.

Embedded Finance: What Does it Take to Prosper in the New Value Chain?

Timestamps:
- Defining embedded finance (11:10)
- Sticky & data rich relationships (12:42)
- A new value chain & how organisations are positioning themselves within it (13:16)
- Who wins from a revenue perspective, and how will that shift in the next 2-5 years? (16:42)
- New use cases of embedded finance (26:20)
- What capabilities are needed to operate in this value chain? (29:29)
- Are we seeing other platforms bringing financial services in-house? Or is this limited to bigger companies? (34:31)
- Risk within the value chain, and embedded finance model (38:24)
- Stepped approach to embedded finance (40:10)
- Regulations in an embedded finance context (41:39)
- Most important points to consider about risk and compliance (45:54)
- Implications of complete embedded financial services (48:05)

Sources & Resources cited:

Sophie's Book Co-Authored by Scarlett Seiber: Embedded Finance: When Payments Become An Experience

Please subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!

You can find Adam Davis here
- You can find Jeff Tijssen here
- You can find Matt Harris here
- You can find Sophie Guibaud here

Next Episode

Institutional Blockchain Adoption: What is the Current State and Where is it Heading?

In this episode, we explore how the latest cycle in the cryptocurrency market has impacted institutional adoption of the underlying technology; blockchain. Enterprise adoption of the technology is still prevalent. In Finance we are seeing blockchain technology adapted for multiple use cases, for instance, International Payments, to address some specific niches in Capital Markets, in Trade Finance, looking to solve Digital Ownership, looking to disrupt Loyalty and the tokenization of private assets.

Within Financial Services, the ‘purists’ have been building underneath the hype.

We will look at where the institutional adoption of blockchain is at right now, what are some of the most applicable use cases, and where we might see it go in the future.

Timestamps:

06:23: Institutional blockchain adoption - What is the current state, and where are we heading?
- 10:24: What are the appeals and use cases of organisations using blockchain technology?
- 18:12: What are the different types of blockchains, and where will adoption head in the future of the financial services industry. - 24:16: Risk focuses and adopting new use cases on chain.
- 36:00: Risk controls when using blockchain infrastructure.
- 41:23: Will Web2 companies continue to invest in this space?
- 45:48: Where will blockchain technology develop, and be adopted, looking 10 years into the future from now?
- 49:02: Will the adoption of blockchain technology by other industries outside of FS lead to widespread adoption?