Neobanks have outstripped traditional banks in app user acquisition in 2023, with an impressive 18m more app users than their legacy counterparts, according to a recent analysis by App Radar.
The surge in popularity for FinTech platforms such as Tandem Bank, which saw a 110% increase in new app downloads over the previous year, highlights a significant shift in consumer banking habits. Other FinTech entities like Revolut and Monzo also showed substantial gains, with increases of 46% and 20% respectively.
Revolut emerged as a dominant force in the sector, accounting for 38% of all new banking app downloads in Europe and the UK. This growth has pushed its total user base up significantly, making it a clear leader among European neobanks. On the other hand, legacy banks have not been left entirely behind, with NatWest recording an 18% increase in downloads in 2023—showing that traditional banks are still managing to expand their digital offerings effectively.
The financial commitment to acquiring new users in the finance category is highlighted by another SplitMetrics report on Apple Search Ads. The report reveals that the Cost per Acquisition (CPA) for finance apps is the highest among all app categories at $8.57, which is 72% more than the next most expensive category. This high cost underlines the competitive nature of the digital banking landscape and the substantial investment required to attract new users.
SplitMetrics Agency General Manager Thomas Kriebernegg provided insights into these dynamics. “This is fantastic news for the banking and finance app category. The sector is growing with 13% more downloads on Android devices in 2023. FinTech and neobanks are continuing to close the gap with legacy banks, which is not surprising as it is a trend we have been seeing for the past four or so years,” Kriebernegg said. He further noted the leadership role of Revolut in this growth and the financial challenges this expansion entails, “Revolut is the kingmaker of the apps when it comes to acquiring Android downloads. If they continue in this direction and get even more downloads in 2024, this may be what pivots neobanks away from legacy banks. Growth comes at a cost though, as our Apple Search Ads study has shown. With such a high CPA of $8, it could mean that it will be a very expensive challenge for neobanks as the sector tries to sustain its growth.”
In conclusion, while FinTech platforms are rapidly expanding their user bases, the associated costs are also mounting, posing significant challenges for sustained growth in the competitive digital banking market.
Source: fintech.global
