Challenger Banks in North America - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The challenger banks market in North Ameria is segmented based on the services offered and the end-user type - Growth, Trends, and Forecast (2020-2025)

Market Snapshot

Challenger Banks in North America (2020-2025)
Study Period: 2016 - 2026
Base Year: 2020
CAGR: 10.5 %

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Market Overview

Despite ongoing innovation and regulatory turmoil in financial services over the past couple of decades, traditional banks have largely preserved their role in the financial ecosystem. Today, there are still thousands of branch-based banks and credit unions in the U.S., and competition from new, online-focused challengers has been limited. However, this may be changing as there is clearly a groundswell of new, well-funded competition emerging from “Challenger Banks.”

As more and more customers have grown dissatisfied with traditional banks, challenger banks have risen to the occasion. With no physical branches and lower overhead costs, these online- and mobile-only banks can offer better products with lower fees. For younger generations, these features are appealing. Millennials are two to three times more likely to switch banks than other generations.

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.

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Key Market Trends

Market Opportunity: Traditional Banks Raise Maintenance Fee

Traditional banks continue to raise fees while public trust remains questionable. A few incidents showcase the same. For example, on September 8, 2016, Wells Fargo admitted to having created 3.5 million fake accounts and agreed to pay USD 185 million in fines and penalties to regulators. Consumers paid USD 34.4 billion in overdraft fees in 2017. This was the highest since 2009. Monthly maintenance fees were up 8% compared to 2013, averaging over USD 13 a month. ATM fees were up 10.7% compared to 2013. The number of traditional banks offering free checking accounts is dropping. All these factors have paved the way for consumers to look for cheaper and better options in the form of challenger banks.

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Total United States' Bank Deposits Were Rising

Total bank deposits in the United States summed up to 13.9 trillion USD in 2018. Despite the drop in the numbers of banks, total bank deposits have grown at 5% cagr from 1990 through 2018. Despite the drop in the number of accounts and savings product traction in traditional banks, the deposit growth in the overall banking system in the United States indicates the prominence gained by challenger banks. 

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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. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    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

  5. 5. MARKET SEGMENTATION

    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

  6. 6. COMPETITIVE LANDSCAPE

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

    2. 6.2 Company Profiles

      1. 6.2.1 Chime

      2. 6.2.2 Varo

      3. 6.2.3 Aspiration

      4. 6.2.4 MoneyLion

      5. 6.2.5 Qapital

      6. 6.2.6 BankMobile

      7. 6.2.7 Upgrade

      8. 6.2.8 Dave

      9. 6.2.9 Zero

      10. 6.2.10 Stash

      11. 6.2.11 Deserve

      12. 6.2.12 Current*

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

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

The Challenger Banks in North America is growing at a CAGR of 10.5% over the next 5 years.

Chime, Varo Money, Aspiration, MoneyLion Inc, Qapital are the major companies operating in Challenger Banks in North America.

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