Europe's neobanks are outpacing legacy banks in app adoption
A new study examining the adoption of banking apps among European customers has revealed that users prefer neobank offerings and their adoption of the technology is outpacing offerings available from traditional incumbents.
The study of Google Play Store downloads, carried out by App Radar, has shown that out of the analysed apps, neobanks have made the biggest gains in 2022. Atom Bank has seen app downloads increase by 101%, Viva Wallet by 54%, Tandem Bank by 53%, Monzo by 49%, Revolut by 31% and Metro Bank by 28%.
More customers downloading neobank apps than legacy system banking apps
UK neobanks have fared slightly better than their European counterparts with UK neobanks’ Android downloads having increased by 15% in 2022 while European neobanks’ downloads increased by 10%. When combined, both European and UK neobanks have increased their Android users by 11%.
But the reports shows that in contrast, legacy banks have not gained as many Android downloads as neobanks in 2022. European and UK legacy banking apps were down by 1.5% in 2022 in the Google Play Store when compared to 2021. However, UK legacy banks have added more Android users in 2022 (10% more when compared to 2021) than their European counterparts (a decrease of 8%).
Overall, app downloads for Android banking apps have increased by 5% in 2022 when compared to 2021.
Swiss legacy banks faring better in app downloads
Swiss legacy bank UBS has seen the biggest growth with 79% more downloads in 2022, while UK legacy banks Lloyds, Halifax and HSBC experienced gains of 16%, 12% and 12% respectively.
In terms of 2022 downloads, Revolut has increased its user base the most with 8.5 million downloads followed by Credit Agricole with 1.6 million, Monzo Bank with 1.5 million, Santander with 1.4 million, Intesa Sanpaolo with 1.2 million.
The most popular apps in terms of estimated lifetime downloads (as of 31 December 2022) are Revolut with 26 million followed by Credit Agricole with 13 million, Barclays with 11 million, Santander with 10 million and Intesa Sanpaolo with 9.7 million.
Silvio Peruci, Managing Director, App Radar, said: "Following a brief slow down in 2021, the fintech banking sector is continuing its upward march. 2022 saw a 5% increase in banking app downloads (26m) from 2021’s 25 million. Generally, neobanks have made the biggest advances, especially when you look at percentage growth with an 11% increase on 2021. Also, the majority of the top ten banking apps that experienced growth in 2022 are all neobanks: Atom Bank, Viva Wallet, Tandem Bank, Monzo Bank, Revolut, Metro Bank, First Direct and Monese.
“This shows that even though legacy banks may still have a larger general market share than neobanks, the gap is decreasing and competition is increasing.
“UK legacy banks’ gains are smaller when looking at percentage growth. However, none of those legacy banks analysed experienced a decrease, which points to the fact that they are steadily adding new younger customers or converting existing customers to mobile banking.
Peruci added, “We’ll have to see how these apps fare in 2023, but with the on-going cost of living crisis, both sides of the market will have to zero-in on their user acquisition strategy. With more choices available than ever for consumers, companies will have to fight for new users with innovative functionality and smart marketing techniques to attract and retain users.”