Challenger Banks in Europe - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Challenger Banks Market in Europe is segmented based on services offered and end user type - Growth, Trends, and Forecast (2020-2025)

Market Snapshot

Challenger Banks in Europe (2020-2025)
Study Period: 2016 - 2026
Base Year: 2021
CAGR: 40.5 %

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Market Overview

The EU Banking Industry - similar to the US banking landscape – is dominated by large players. However, it is also showcasing characteristics of a market ripe for disruption through a combination of economic, regulatory & secular trends. Following the crisis, large institutions damaged their reputations and created an environment for disruptors who – supported by innovative technology – can offer competitive banking and lending services. These disruptors are able to utilize a straightforward, simple, and technology-focused business model to offer products to consumers typically unsatisfied and/or underserved by traditional large incumbents.

The origins of Challenger Banks in the UK date back to the most recent crisis, during which large institutions engaged in questionable practices and undertook risks through complex business activities, difficult to comprehend for both regulators and consumers. UK has also led the charge across EU FinTech, as it is home to the most extensive network of established Challenger Banks in Europe.

The UK has one of the most established and concentrated banking industries in Europe, with large financial institutions controlling significant market share and the market is supported by traditionally high regulatory barriers to entry.

Scope of the Report

An understanding of the Challenger Banks in Europe, regulatory environment, challengers banks, and their business models, along with detailed market segmentation, product offerings such as deposits, loans to define their financial performance indicators, current market trends, changes in market dynamics, and growth opportunities. In-depth analysis of the market size and forecast for the various segments.

By Service Type
Savings Products
Current Account
Consumer Credit
By End-User Type
Business Segment
Personal Segment

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Key Market Trends

Challenger Banks Gaining Traction in Europe

On January 13, 2018, an overhaul of the Payments Services Directive (PSD2) required banks to open their payments infrastructure and customer data assets allowing third parties to use them to develop payments and information services for consumers – essentially PSD2 dissolved banks’ monopoly on consumer financial data. This helped many players like N24, Revolut to provide expanded service offerings and gain customer base. Also large banks entered partnerships with fintech players. 


Challenger Banks offer attractive returns for savers in Europe

Challenger Banks in Europe have this major proposition - better products at cheaper costs. Using the rapid technological adoption of customers and legacy systems of large players being insufficient to cater to their growing needs as an opportunity, new banks have come up with attractive products offered through online platforms at cheaper costs. For comparison sake, average interest rates offered for savings account holders of leading large banks in Europe namely Barclays, BNP Paribas, HSBC, RBS, Santander, Lloyd's, Credit Agricole, Deutsche Bank are compared with challengers banks like Atom Bank, N26, Tandem, ad a few others. There is clear benefit observed which is presented in the infographic below. 


Competitive Landscape

The report includes an overview of challenger banks operating across the region. We wish to present detailed profiling of a few major companies which cover product offerings, regulations governing them, their headquarters, and financial performance. Currently, some of the major players dominating the market are listed below.

Table of Contents


    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Insights on Panerships between Challenger Players And Other Fintechs

    3. 4.3 Performance Indicators of Challenger Banks

    4. 4.4 Industry Policies And Government Regulations

    5. 4.5 Market Drivers

    6. 4.6 Market Restraints

    7. 4.7 Value Chain / Supply Chain Analysis

    8. 4.8 Porters 5 Force Analysis

      1. 4.8.1 Threat of New Entrants

      2. 4.8.2 Bargaining Power of Buyers/Consumers

      3. 4.8.3 Bargaining Power of Suppliers

      4. 4.8.4 Threat of Substitute Products

      5. 4.8.5 Intensity of Competitive Rivalry

    9. 4.9 Impact of COVID-19 on the Market


    1. 5.1 By Service Type

      1. 5.1.1 Payments

      2. 5.1.2 Savings Products

      3. 5.1.3 Current Account

      4. 5.1.4 Consumer Credit

      5. 5.1.5 Loans

      6. 5.1.6 Others

    2. 5.2 By End-User Type

      1. 5.2.1 Business Segment

      2. 5.2.2 Personal Segment


    1. 6.1 Market Competition Overview (Market Concentration And M&A Deals)

    2. 6.2 Company Profiles

      1. 6.2.1 OakNorth Bank

      2. 6.2.2 Revolut

      3. 6.2.3 Number26 GmBH

      4. 6.2.4 Monzo Bank Limited

      5. 6.2.5 Monese

      6. 6.2.6 Tandem Bank

      7. 6.2.7 Pockit

      8. 6.2.8 One Savings Bank

      9. 6.2.9 Shawbrook Bank

      10. 6.2.10 Aldermore

      11. 6.2.11 Atom Bank PLc

      12. 6.2.12 TSB

      13. 6.2.13 Clydesdale

      14. 6.2.14 Virgin Bank

      15. 6.2.15 Metro Bank

      16. 6.2.16 Starling Bank

      17. 6.2.17 Fidor Solutions AG*

    3. *List Not Exhaustive

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Frequently Asked Questions

The Challenger Banks in Europe market is studied from 2016 - 2026.

The Challenger Banks in Europe is growing at a CAGR of 40.5% over the next 5 years.

OakNorth Bank, Revolut, Number26 GmBH, Monzo, Tandem Bank are the major companies operating in Challenger Banks in Europe.

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