Overview of 49 Neobanks in the United States as of June 2024
Here’s an overview of the dynamic world of Fintech Banks (also known as neobanks). Despite challenges (at least 14 closed in the last year), these digital-first banks are innovating with personalized services and AI-driven solutions, appealing to tech-savvy consumers and forming strategic partnerships with traditional banks.
This list showcases 49 leading fintech banks that are at the forefront of transforming the banking landscape through innovative products and strategic market moves. Each entry provides a concise summary of the bank, a link to a detailed page for more information (click on the bank name), and includes the bank’s TrustPilot score with a direct link to their respective TrustPilot review page.
 | Fintech banks Includes banks for businesses (Biz) and teenagers (Teens) | Head Office | FDIC Insur | Trust Pilot Score |
|---|---|---|---|---|
 | Acorns simplifies investing by automatically investing your spare change into diversified portfolios, offering easy access to IRAs, children’s accounts, and integrated banking services. | US | Yes | 2.4 430 reviews |
 | Arival (Biz) offers innovative digital-first solutions for global business needs, offering inclusive financial services for digital nomads and global citizens. | US | Yes | 3.0 8 reviews |
 | Aspiration offers sustainable banking solutions with competitive products, focused on environmental impact through cash-back rewards and ethical financial choices | US | Yes | 4.4 1,623 reviews |
 | Atmos is dedicated to eco-friendly banking, offering checking, P2P, and high-yield savings accounts that support environmental sustainability and green initiatives. | US | Yes | 3.3 21 reviews |
 | Axos Bank offers digital banking solutions with no monthly fees, high-yield savings, competitive loans, and 24/7 customer support, for modern, tech-savvy consumers. | US | Yes | 1.9 183 reviews |
 | Bambu offers modern digital banking solutions for individuals, emphasizing convenience, competitive rates, financial services like P2P, and multilingual support. | US | Yes | 4.1 18 reviews |
 | BMTX (Was Bank Mobile) offers seamless digital banking solutions, including fee-free checking, high-yield savings, P2P, and robust merchant services for businesses. | US | Yes | 3.9 2,719 reviews |
 | Betterment offers automated investing, high-yield savings, and checking accounts tailored for millennials, though it lacks P2P money transfers. | US | Yes | 1.7 28 reviews |
 | Brex (Biz) s a Fintech bank offering high credit limits, tailored rewards, and seamless integrations, designed to meet the financial needs of modern, tech-savvy businesses. | US | Yes | 2.9 565 reviews |
 | Bridge Money offers user-friendly checking and high-yield savings accounts, instant P2P transfers, competitive credit cards, and personal loans, for tech-savvy consumers. | US | Yes | 3.2 1 review |
 | Cheese is designed for millennials, providing fee-free banking, high-yield savings, P2P money transfers, global debit cards, and a user-friendly mobile app experience. | US | Yes | 3.2 2 reviews |
 | Chime offers fee-free banking, early direct deposit, high-yield savings, P2P money transfer, and a user-friendly mobile app tailored for Millennials and Gen Z. | US | Yes | 2.3 9,246 reviews |
 | Cogni offers fee-free checking, early direct deposit, P2P transfers between Cogni users, crypto wallets, international transfers, and discounted gift cards. | US | Yes | 3.1 2 reviews |
 | Copper offers user-friendly banking solutions with minimal fees, P2P, seamless digital integration, and a focus on transparency for tech-savvy individuals and businesses. | US | Yes | 0.0 0 reviews |
 | Current offers fee-free checking, competitive savings, P2P, and seamless mobile banking designed for tech-savvy users seeking a hassle-free and efficient digital bank. | US | Yes | 4.5 7,957 reviews |
 | Dave offers fee-free checking, small cash advances, budgeting tools, and side hustle opportunities, making it ideal for young adults and those managing tight finances. | US | Yes | 2.4 6 reviews |
 | Empower offers no-fee checking, high-yield savings, instant cash advances, P2P payments between Empower accounts, and budgeting tools, targeting tech-savvy millennials and Gen Z. | US | Yes | 1.9 26 reviews |
 | GoBank offers a user-friendly digital banking experience with no overdraft fees, early direct deposits, and P2P between GoBank accounts, targeting tech-savvy consumers seeking convenience. | US | Yes | 1.3 47 reviews |
 | GoHenry – now Acorns Early Teens GoHenry offers prepaid debit cards for kids, emphasizing financial education and parental oversight, but does not provide P2P money transfers. | UK | Yes | 4.3 3,279 reviews |
 | Green Dot offers checking, high-yield savings, prepaid cards, secured credit cards, and P2P transfers between Green Dot accounts for fee-conscious users. | US | Yes | 1.1 623 reviews |
 | Greenlight Teens is a family-focused neobank offering financial education, money management tools, and parental controls, including P2P money transfers. | US | Yes | 3.9 5,266 reviews |
 | Greenwood offers fee-free banking tailored for Black and Latinx communities, featuring P2P transfers and high-yield savings. | US | Yes | 2.4 300 reviews |
 | JUNO blends traditional banking with cryptocurrency services, appealing to tech-savvy users seeking high-yield savings, P2P, and a modern banking experience. | US | Yes | 4.2 637 reviews |
 | Lili Biz offers fee-free banking tailored for freelancers with a user-friendly mobile app, P2P, tax tools, and cashback rewards, ideal for managing flexible incomes efficiently. | US | Yes | 4.7 3,125 reviews |
 | M1 Finance offers automated investing, borrowing against portfolios, and a no-fee checking account with cash back, appealing to DIY investors. | US | Yes | 1.9 166 reviews |
 | Majority Bank offers fee-free checking, global debit cards with no foreign fees, affordable international transfers, P2P, and community-focused support for U.S. immigrants. | US | Yes | 4.7 6,833 reviews |
 | Mercury Bank Biz caters to startups and tech firms with fee-free business accounts, API integration, and ACH transfers, ideal for efficient financial management and growth. | US | Yes | 3.6 1,013 reviews |
 | MoneyLion provides a wide range of digital financial services, including banking, savings, investments, and credit-building tools. No P2P money transfers. | US | Yes | 4.4 28,787 reviews |
 | Monzo offers a sleek, mobile-first banking experience with services like checking, high-yield savings, credit cards, and instant P2P money transfers between Monzo accounts. | UK | Yes | 4.1 34,696 reviews |
 | North One Biz simplifies business banking with a user-friendly mobile app, unlimited transactions, P2P, and integrations with business tools for small businesses/freelancers. | US | Yes | 4.4 191 reviews |
 | NOVO Biz offers streamlined, fee-free business checking tailored for small businesses and entrepreneurs, using ACH and integrating with tools like Stripe for payments. | US | Yes | 4.4 4,186 reviews |
 | ONE Bank provides no-fee checking, high-yield savings, flexible credit lines, and P2P money transfers, ideal for digital users seeking convenience and financial growth. | US | Yes | 1.4 192 reviews |
 | Qube Money offers budgeting, spend management, bill pay, and instant P2P transfers between Qube accounts, catering to tech-savvy users for efficient money management. | US | Yes | 0 0 reviews |
 | Quontic Bank offers checking, high-yield savings, credit cards, loans, and P2P money transfers for tech-savvy consumers seeking modern banking solutions. | US | Yes | 4.0 573 reviews |
 | Relay Bank Biz specializes in fee-free business banking with multiple checking accounts, ACH transfers, and seamless integration with accounting software. | US | Yes | 4.6 1,665 reviews |
 | Revolut offers global currency exchange, budgeting tools, and cryptocurrency support, along with instant P2P transfers between Revolut accounts. | UK | Yes | 4.1 156,232 reviews |
 | Save Bank offers a unique blend of high-yield savings and professional investment management, ideal for tech-savvy individuals seeking higher returns with minimal risk. | US | Yes | 2.6 28 reviews |
 | Skrill offers a comprehensive suite of financial services including checking, savings, loans, credit cards, investments, and P2P money transfers. | UK | Yes | 4.7 12,400 reviews |
 | SoFi provides a wide range of financial services including checking, savings, loans, credit cards, investments, and ACH money transfers through its SoFi Money account. | US | Yes | 4.6 8,603 reviews |
 | Square Biz offers a robust suite of financial services tailored for small businesses, including checking, loans, merchant services, and P2P money transfers via Cash App. | US | Yes | 4.1 4,756 reviews |
 | Stash Bank integrates banking and investing with a Stock-Back® Card and fractional shares, targeting young investors with educational resources and simple investment options. | US | Yes | 2.8 3 reviews |
 | Step Bank Teens targets teen banking with fee-free accounts, secured Visa cards for credit building, and P2P transfers exclusive to Step users. | US | Yes | 4.3 1,081 reviews |
 | TransferGo specializes in rapid international money transfers to over 160 countries, including P2P, making it ideal for expats, freelancers, and businesses. | UK | No | 4.7 35,673 reviews |
 | Upgrade Bank offers checking with cashback, credit-building loans, and the Upgrade Card, plus P2P transfers between Upgrade accounts, ideal for credit-conscious users. | US | Yes | 4.4 40,736 reviews |
 | Varo offers fee-free checking, high-yield savings, credit-building, and P2P transfers via Zelle, targeting tech-savvy millennials and Gen Z with a user-friendly app. | US | Yes | 2.0 2,314 reviews |
 | Wirex integrates fiat and cryptocurrency management with a Visa card, P2P transfers, and a rewards program, appealing to tech-savvy users and crypto enthusiasts. | IE | No | 3.4 15,972 reviews |
 | Wise Bank offers low-cost international transfers, multi-currency accounts, debit cards, and P2P transfers, excelling in transparency, ease of use, and real exchange rates. | UK | Yes | 4.3 223,935 reviews |
 | Yotta gamifies savings with prize-linked accounts, offering high-yield savings, checking, and weekly sweepstakes. Ideal for tech-savvy savers seeking excitement. | US | Yes | 4.1 1,747 reviews |
 | Zeta Bank offers joint accounts, bill pay, and P2P transfers (between Zeta accounts only), targeting families with intuitive budgeting, savings, and expense-tracking tools. | US | Yes | 3.5 13 reviews |
Advancements in the Industry
Over the past year, Fintech banks have continued to innovate and expand their offerings, making significant strides in digital payments and personalized financial services, yet less than half provide customer-required peer-to-peer (P2P) payments. However, the adoption of AI and machine learning has enhanced customer experience through personalized services and real-time insights, allowing for more tailored financial solutions.
Market Status and Business Closures
The fintech industry continues to face significant challenges, leading to the closure of at least 14 Fintech banks. Many of these closures stem from factors such as regulatory pressures, high operational costs, and difficulties in achieving profitability. Fintech banks often struggle with high customer acquisition costs and low average revenue per user, making it challenging to sustain operations without significant funding.
Leading Products and Services
Fintech banks have carved a niche with several key products and services that appeal to both consumers and businesses. Popular offerings include:
- Digital Banking Solutions: Comprehensive mobile and online banking services that offer ease of use and convenience.
- P2P Payments: Quick and easy transfer of money between individuals.
- Personalized Financial Management: Tools for budgeting, saving, and investing that leverage AI to provide personalized advice.
- Lending and Credit Services: Innovative credit products and loan options, often with more flexible terms compared to traditional banks.
- Banking-as-a-Service (BaaS): Platforms that allow businesses to integrate banking services into their own offerings.
Market Perception
Fintech banks are viewed differently by various stakeholders:
- Consumers: Generally positive, especially among younger, tech-savvy individuals, with 41% planning to increase their use of fintech products.
- Regulators: Regulatory bodies have been both supportive and challenging. It can be difficult to achieve both innovation and compliance.
- Traditional Banks: Initially seen as disruptors, Fintech banks are increasingly viewed as potential partners, indicating a trend toward integration rather than direct competition.
Challenges and Opportunities
Fintech banks face several key challenges:
- Regulatory Compliance: Adapting to stringent regulations can strain resources.
- Profitability: Difficult to sustain profitability due to high acquisition costs and low margins.
- Security: Protecting against cyber threats requires continuous investment.
- Differentiation: Standing out in a crowded market with similar offerings.
However, they also have opportunities:
- AI and ML Integration: Leveraging AI and machine learning for personalized customer interactions and proactive financial management.
- Expansion in Emerging Markets: Capitalizing on the growing digital banking needs in regions like Africa and Southeast Asia.
- Partnerships: Forming strategic partnerships with traditional banks to enhance service offerings and expand market reach.
Trends and Next Steps
Key trends for Fintech banks in 2024 include a continued focus on enhancing customer experience through hyper-personalization and leveraging AI. They are also expected to streamline operations and reduce costs through automation and improved back-office efficiencies. The next steps for Fintech banks involve addressing profitability challenges, ensuring robust security measures, and navigating complex regulatory landscapes to establish themselves as sustainable players in the financial ecosystem.
Fintech banks are poised to grow significantly, with the market expected to reach $2 trillion by 2030 (Grand View Research, 2022). Their success will depend on their ability to innovate, form strategic partnerships, and adapt to evolving customer and regulatory demands.
Impact of the FDIC’s Proposed Rule – Updated October 8, 2024
As the neobank ecosystem continues to evolve, the FDIC’s proposed rule on “Requirements for Certain Custodial Deposit Accounts” introduces a new layer of complexity. This rule, aimed at reclassifying certain deposits as brokered, could reshape the operating landscape for many neobanks, influencing their partnerships, compliance strategies, and cost structures. To navigate this regulatory shift, it’s critical to assess its potential impact across different categories of neobanks based on their banking relationships.
Group 1: Neobanks with a Single FDIC Member Agreement
Neobanks with a single FDIC partner are likely to experience the most immediate and significant impact under the proposed rule. Their existing partnerships often hinge on avoiding brokered deposit classifications. However, if these deposits are reclassified as brokered, these neobanks could face a cascade of changes:
- Increased costs for partner banks, which could be passed on to neobanks and their consumers.
- Heightened regulatory scrutiny and more rigorous reporting requirements.
- Potential restructuring of banking relationships to comply with the new rules.
- Limitations on deposit growth for banks nearing their capital thresholds, potentially stalling growth for their neobank partners.
In this group, 30 neobanks face potential challenges:
- Acorns (Lincoln Savings Bank and NBKC Bank)
- Arival (Quaint Oak Bank)
- Atmos (Five Star Bank)
- Bambu (Community Federal Savings Bank)
- Bank Mobile/BMTX (First Carolina Bank)
- Betterment (NBKC Bank)
- Cheese (Coastal Community Bank)
- Cogni (Community Federal Savings Bank)
- Copper (Evolve Bank & Trust)
- Dave (Evolve Bank & Trust)
- Empower (UMB Bank, N.A.)
- GoHenry (Community Federal Savings Bank)
- Greenlight (Community Federal Savings Bank)
- Greenwood (Coastal Community Bank)
- Juno (Evolve Bank & Trust)
- Majority (Axiom Bank, N.A.)
- MoneyLion (Pathward, N.A.)
- Monzo (Sutton Bank)
- North One (The Bancorp Bank, N.A.)
- Novo (Middlesex Federal Savings, F.A.)
- ONE Bank (Coastal Community Bank)
- Qube Money (Choice Financial Group)
- Relay Bank (Evolve Bank & Trust)
- Save (Webster Bank)
- Square (Sutton Bank)
- Stash (Stride Bank, N.A.)
- Step (Evolve Bank & Trust)
- Wise (Community Federal Savings Bank)
- Yotta (Evolve Bank & Trust)
- Zeta (Piermont Bank)
Group 2: Neobanks with 2-3 FDIC Member Agreements
Neobanks in this category may find some breathing room in their flexibility due to multiple banking partnerships. However, they are not immune to the challenges posed by the proposed rules:
- Reclassification of deposits as brokered across several partner banks could still occur, increasing complexity.
- Compliance management could become more challenging with multiple regulatory frameworks to navigate.
- Neobanks may need to renegotiate or restructure their agreements with partner banks.
- The added regulatory burden on partner banks could result in cost increases for neobanks.
The seven neobanks in this group are:
- Chime (The Bancorp Bank, N.A. and Stride Bank, N.A.)
- Current (Choice Financial Group and Cross River Bank)
- Lili (Choice Financial Group and Sunrise Banks, N.A.)
- Mercury (Choice Financial Group and Evolve Bank & Trust)
- Revolut (Metropolitan Commercial Bank and Sutton Bank)
- Skrill (Community Federal Savings Bank and Metropolitan Commercial Bank)
- Upgrade (Cross River Bank and Blue Ridge Bank)
Group 3: Neobanks with 4 or More FDIC Member Agreements
These neobanks operate with a more complex web of partnerships, making them particularly vulnerable to the regulatory shifts:
- Compliance complexity could skyrocket, driving up costs.
- Multiple banking relationships might need to be restructured to align with the new rules.
- Some partnerships could become untenable, reducing FDIC coverage and affecting customer trust.
- Regulatory scrutiny on deposit placement activities could tighten, further complicating operations.
The four neobanks in this group are:
- Brex (multiple FDIC-insured banks, up to $6 million coverage)
- M1 Finance (B2 Bank, N.A. + Insured Deposit Network Program, up to $5 million coverage)
- SoFi (network of FDIC member banking partners, up to $2 million coverage)
- Aspiration (Coastal Community Bank + 4 others in sweep program – over $1 million in coverage)
Group 4: Neobanks with Their Own FDIC Membership
Neobanks that hold their own FDIC membership could be more insulated from the immediate effects of the proposed rule. However, they will still face increased regulatory scrutiny:
- Their deposit-gathering activities could be more closely monitored.
- If they leverage third-party platforms or partnerships for customer acquisition, some deposits could still be reclassified as brokered.
- They may gain a competitive edge over other neobanks by maintaining lower regulatory costs.
The five neobanks in this group are:
- Axos Bank
- GoBank (Green Dot Bank)
- Green Dot
- Quontic Bank
- Varo Bank
FDIC Member Banks with BaaS Partnerships
In addition to the neobanks, FDIC member banks that offer Banking-as-a-Service (BaaS) are also in the crosshairs of this regulatory change.
Group A: Banks with $10 Billion or More in Assets
Larger BaaS banks will likely face increased regulatory pressure:
- Higher FDIC assessment fees due to rising brokered deposit levels.
- Stricter liquidity requirements.
- Potential need to restructure BaaS partnerships to manage deposit classification.
- Increased scrutiny and reporting demands.
Only two banks fall into this group:
- Cross River Bank
- The Bancorp Bank, N.A.
Group B: Banks Below $10 Billion in Assets
Smaller BaaS banks may find it harder to navigate the proposed rule’s complexities:
- Tighter regulatory oversight and potential brokered deposit restrictions.
- Difficulties in maintaining compliance if they risk falling below well-capitalized status.
- Restructuring BaaS partnerships could become necessary to mitigate risks.
- Smaller banks could face competitive disadvantages compared to larger players with more regulatory flexibility.
The 15 banks in this group include:
- Coastal Community Bank
- Community Federal Savings Bank
- Evolve Bank & Trust
- Lincoln Savings Bank
- NBKC Bank
- Quaint Oak Bank
- Five Star Bank
- First Carolina Bank
- Choice Financial Group
- Stride Bank, N.A.
- Sutton Bank
- Middlesex Federal Savings, F.A.
- Webster Bank
- Piermont Bank
- Blue Ridge Bank
The proposed FDIC classification could have far-reaching effects across the neobank and BaaS ecosystem. Partnerships may be reshaped, costs could increase, and competitive dynamics within the industry are likely to shift, creating both challenges and opportunities for players across the board. As regulatory scrutiny deepens, it will transform cost structures, operational models, and risk profiles, driving changes that reflect the industry’s adaptation to a more regulated and structured market environment. These shifts in competitive dynamics could also open doors for innovation and strategic positioning:
- Consolidation of BaaS providers
Increased regulatory oversight and higher compliance costs may drive consolidation among BaaS providers. Larger, well-capitalized firms are better positioned to absorb these challenges, which could lead to smaller players either merging with these firms or exiting the market entirely. The result may be a more concentrated but robust BaaS landscape. - Shift toward bank-owned BaaS platforms
Traditional banks could seize the opportunity to leverage their existing regulatory frameworks by launching their own BaaS platforms. With their built-in compliance infrastructures, they may gain a competitive edge over pure BaaS providers, offering a more seamless integration of banking services while meeting regulatory demands more efficiently. - Increased focus on risk management and due diligence
As regulatory expectations rise, neobanks and fintech companies will likely prioritize risk management and regulatory compliance when selecting BaaS partners. This shift could advantage established BaaS providers with strong compliance frameworks, making them more attractive in this evolving ecosystem. - Rise of specialized compliance-as-a-service offerings
The added complexity of the regulatory environment may give rise to a new market for specialized compliance-as-a-service providers. These firms can offer tailored solutions that help neobanks and fintech companies navigate compliance challenges, creating a competitive niche in the market. - Acceleration of direct banking license acquisitions
Larger neobanks and fintech firms may fast-track their efforts to obtain banking licenses, reducing their reliance on BaaS providers. This strategic move could elevate competition between neobanks and traditional banks, particularly in key market segments where both compete for similar customers. - Emergence of tiered BaaS offerings
To address varying client needs, BaaS providers may develop tiered service models that cater to different risk profiles and regulatory requirements. This could introduce a new layer of competitive differentiation, with providers vying to offer more comprehensive regulatory support and tailored compliance services. - Increased partnerships between traditional banks and fintech companies
As regulatory pressures grow, traditional banks and fintech companies may form closer partnerships. Banks could provide the necessary regulatory infrastructure and expertise, while fintechs drive technological innovation and customer experience. This collaboration may create new competitive alliances that push the industry forward. - Geographic expansion strategies
Both BaaS providers and neobanks might reconsider their geographic footprints, seeking out regions with more favorable regulatory environments. This shift could heighten competition in specific markets, while also presenting growth opportunities for local players in regions where regulations are more stringent.
These dynamics, driven by the FDIC’s proposed rule, will likely reshape the competitive landscape in significant ways, prompting both consolidation and innovation as the ecosystem adapts.
Sources:
