Model Behaviour – a new cartoon that illustrates how Neobank’s need to evolve their fee-based business models to more service-based revenues.
New entrant banks (e.g. Revolut, Dave) entered the consumer market offering debit cards and current accounts and then expanded into higher-margin exchange fees (e.g. crypto). While this resulted in fast customer acquisition, a fee-based business model is susceptible to competitive pressure and has low margins.
To address this, Neobanks need to move into banking services, which offer a more stable revenue stream and higher corporate valuations. For example, providing subscription-based services that offer a bundle of services, such as EmPower and MoneyLion’s Plus product that brings investing, borrowing, and checking accounts into a single, subscription-based, membership.
Cartoon provided by Ian Foley of iantoons.com
