<Table of contents>
- “Digital Banking” Overseas News in April 2021
- Check the definition of “Neo” and “Challenger” banks
- The reality of “neo banks + traditional financial institutions”
- Are “neobanks” banned in France?
- “Challenger banks” gaining momentum
- Challenge: “Transformation of traditional financial institutions into digital banks”
“Digital Banking” Overseas News in April 2021
In April, news related to crypto assets (virtual currency) was particularly noticeable. Regarding digital banks, there was news warning against the use of the term “neobank” by the French central bank, Hokkoku Bank plans to completely migrate its system to Microsoft Azure, a public cloud (PaaS), and Minna no Bank plans to open for general business. It was reported that it would.
“Digital banking” related news that caught my attention in April 2021
| date | News content |
| April 5th | Overseas Filipino Bank (OF Bank) becomes the first digital bank in the Philippines to receive a license |
| April 6 | British challenger bank Tandem Bank migrates to cloud accounting system “MAMBU”. system cutover |
| April 7th | Fidelity Securities, mobile payment company Square, and virtual currency exchange Coinbase (Fidelity, Square, Coinbase) established a virtual currency industry association |
| Sweden’s central bank releases initial research results on digital currency | |
| April 8 | Citi Group (Citi) teams up with Inter-American Development Bank to experiment with cross-border remittances using blockchain |
| UK money app Ziglu opens interest-bearing Bitcoin account | |
| Australian fintech company AfterPay teams up with international payments company Adyen to expand embedded finance services globally | |
| April 12 | France’s central bank informs the fintech industry of rules for using the term ‘neobank’ |
| April 13th | Russia pushes forward with digital ruble |
| Barclays Bank will shut down Pingit, the famous smartphone payment and money transfer app, on June 30th. | |
| April 15th | Challenger Bank N26 begins handling insurance products. We plan to develop various types of insurance in the future. |
| April 16th | JP Morgan tests overseas remittance using blockchain with Taiwanese bank |
| April 20th | KEB Hana Bank completes system migration to Oracle Cloud |
| PayPal-owned mobile payment service “Venmo” begins handling virtual currencies in its app | |
| April 22nd | Norwegian Central Bank prepares to test CBDC (Central Bank Digital Currency) |
| April 23rd | Turkey arrests numerous virtual currency exchange managers who had fled the country |
| April 28th | Barclays US partners with US digital financial infrastructure startup Amount to launch white-label POS with BNPL (pay later) functionality |
Check the definition of “Neo” and “Challenger” banks
As mentioned above, in April 2021, there were reports such as the French central bank’s warning against the use of the term “neobank,” Hokkoku Bank’s complete system migration to Microsoft Azure, and Minna no Bank’s general opening. To look at these, first, let’s organize the positioning of neobanks and challenger banks about “digital banks” and the basic definitions of the terms.
A digital bank is a bank that can provide financial services compatible with the value chain of the online economy. The author recognizes that there are three types of digital banks:
(1) “neo banks” without a banking license that digitally redesign “banks” and provide financial products and services with excellent UI/UX by combining with traditional financial institutions; (2) New banks “Challenger banks” that have obtained a license and redefine the banking business itself in a way different from traditional online banking, and create new functions as a bank with a digitally native approach; (3) traditional finance; Although we are an institution, we are an existing bank that has transformed its core banking system into a cloud-native digital platform.
The reality of “neo banks + traditional financial institutions”
There is no firm definition of neobanks. There are various explanatory articles scattered on the web about “What is a neobank?” They are often talked about in conjunction with challenger banks, and we speculate that each is understood as a different form of “digital bank.” However, one must be careful as neobanks and challenger banks are often used interchangeably, which is confusing. The explanatory article that I think is the easiest to understand is “
banking license, they offer efficient apps designed primarily for smartphones, where traditional It deals with asset management, including partnering with financial institutions to protect deposits and foreign exchange and PFM, and less on credit trading (aside from fintech companies that have sprung from loan handling, such as SoFi and Lending Club).
In Japan, iBank Marketing, a subsidiary of Fukuoka Financial Group (FFG), claims to be a neobank. With permission from a bank agency, we are working as a front for each affiliated bank, “providing a user experience different from traditional financial services and embarking on the creation of new value.”Currently, nine regional banks have adopted the service and it is expanding nationwide. is progressing. The results of SBI Sumishin Net Bank’s neobank division are beginning to lead to the provision of BaaS to bank agents.
Many overseas neo-banks are fintech companies that are managed with the expectation of transaction volume, and some fintech companies have been forced to change their business or close due to the situation where they cannot expect to raise funds from funds due to the coronavirus pandemic.
Moven, which handles mobile banking services, gave up on BtoC business at the end of April 2020 amid poor business performance and downsized its business, with many of its customers transferring to Varo Money, and in 2021 Bilbao Vizcaya Argentaria. The news that “Simple,” a neobank owned by Bank of America (BBVA) and an online payment app, has shut down came as a shock, as both companies were well-known cases in the early days of neobanks .
