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A neobank (also known as an online bank, internet-only bank, virtual bank or digital bank) is a type of direct bank that operates exclusively online without traditional physical branch networks.[1][2] The term "challenger bank" is used in the UK to refer to a number of fintech banking startups that emerged in the wake of the 2007–2009 financial crisis. Their services may be accessed by clients through their respective computers or mobile devices.

The range of services provided by neobanks is not as broad as that of their traditional counterparts. The business model they tend to apply also differs from incumbent banking institutions' model — a large portion of the income of neobanks is mainly made up of transaction fees received when customers pay with their debit card.[3]


The term neobank has been in use since at least 2016[1] to describe fintech-based financial providers that were challenging traditional banks. There were two main types of company that provided services digitally: companies that applied for their own banking license and companies in a relationship with a traditional bank to provide those financial services.


  1. ^ a b "Digital Economy Outlook" (PDF). BBVA Research. 2016. p. 12.
  2. ^ "The unstoppable rise of neobanks". World Finance. Retrieved 31 December 2018.
  3. ^ Walden, Stephanie (2021-06-24). "What Is A Neobank?". Forbes Advisor. Retrieved 2021-11-21.