Legacy banks are falling behind in consumer app adoption as new data reveals the neobanks flying ahead.
An analysis by app analytics and marketing company App Radar has revealed how well the apps of the European and UK banking community performed in terms of downloads over the course of the last year.
The study of Google Play Store downloads has shown that out of the analysed apps, neobanks have made the biggest gains in 2022.
Most notably, the UK neobank Atom Bank saw downloads of its app increase by 101 per cent in 2022 making it a best performer, followed by the Greece-headquartered Viva Wallet‘s growth of 54 per cent and Tandem Bank’s 53 per cent increase in downloads.
Further down the chain, familiar challenger Monzo experienced a 49 per cent increase in its app downloads last year, followed not so closely by its competitors, Revolut and Metro Bank with 31 and 28 per cent increases respectively.
Neobanks battle it out for the top position
The analysis lays clear how the digital banking apps offered by neobanks are outperforming the legacy alternatives. Yet going further into this, it also shows that UK neobanks have fared slightly better than their European counterparts in terms of app performance.
Overall, downloads for UK neobanks’ apps have increased 15 per cent year-on-year (YoY) in 2022, while their EU counterparts only increased by 10 per cent. So when combined, both European and UK neobanks have increased their user bases by 11 per cent.
In contrast, legacy banks have not experienced such gains, and across both jurisdictions, downloads were down 1.5 per cent in 2022.
However, UK legacy banks have added 10 per cent more Android users YoY than their European counterparts, which experienced an eight per cent decrease.
Overall, app downloads for Android banking apps have increased by five per cent in 2022 when compared to 2021. Swiss legacy bank UBS has seen the biggest growth with 79 per cent more downloads in 2022, while UK legacy banks Lloyds, Halifax and HSBC experienced gains of 16, 12 and 12 per cent 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 and Intesa Sanpaolo with 1.2 million downloads.
The most popular apps in terms of estimated lifetime downloads (as of 31 December 2022) are Revolut again 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.
Survival of the fittest
In view of the company’s latest findings, Silvio Peruci, managing director at App Radar, explains that following a brief slowdown in 2021, the fintech banking sector is “continuing its upward march.”
Delving into the figures, Peruci says “2022 saw a five per cent increase in banking app downloads from 2021’s 25 million. Generally, neobanks have made the biggest advances, especially when you look at percentage growth with an 11 per cent increase on 2021,” he adds, before also noting how the majority of the top ten banking apps that experienced growth in 2022 are all neobanks.
“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,” continues Peruci.
“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.
“We’ll have to see how these apps fare in 2023, but with the ongoing 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.”