Transaction value in Nigeria’s Neobanking segment is projected to hit US$1,658m this year.
The emergence of neobanks as mobile-focused financial technology firms has further revolutionized the digital banking experience for customers, especially in areas that are not sufficiently covered by conventional banking activities.
Coupled with the growing number of customers demanding digital financial services, the growth driver of neobanking in Nigeria can also be credited to the convergence of increased internet penetration, and the mass number of Nigeria’s unbanked and underbanked population.
In 2021, the global Neobanking Market was valued at approximately USD 30.77 billion and was anticipated to grow with a healthy growth rate of more than 54.00% over the forecast period 2022-2028.
Meanwhile in Nigeria today, the average transaction value per user in the Neobanking segment amounts to US$2.00k. While the number of users is expected to amount to 2.11m users by 2027, user penetration will be 0.4% this year, and is expected to hit 0.9% by 2027, according to statistics shared by Statista.
Some of the biggest players in Nigeria’s neobanking segment include VBank, Kuda, and Opay.
Kuda Bank launched in 2016 as Nigeria’s first free fully digital bank. The bank, which has raised millions of dollars in funding at very high valuations, can boast of over 2million registered users.
V Bank, owned by VFD microfinance bank, allows users to securely access their accounts, send and receive funds using a unique QR code, manage multiple cards from different banks, track spending, buy airtime and data, generate virtual cards for online payments, fix deposits, and make free transfers, all within a sleek, responsive, and user-friendly interface.
Neobanking is one of the new technologies that have made financial services and processes easier, more efficient, reduced errors, improved communication, and changed how consumers access their funds.
Some other emerging technologies that have hit the financial sector in recent years include mobile banking, Big data, artificial intelligence, Analytics, automation, cloud computing, chatbot, blockchain, cybersecurity and many more.
