Market Trends of Germany Neobanking Industry
Rising Investment for Fintech in Germany Driving future of the Market
The German fintech market grew by approximately 120% over the last 7 years. Germany currently has around 950 active start-ups in the fintech sector. 28% are in Berlin, while 11% are based in Frankfurt, despite Frankfurt being the country's financial hub.
Fintech has made up 10% of all new start-ups in Germany. After information and communication technology, the sector has become the second-greatest start-up activity in the country's start-up ecosystem. The innovative technologies and disruptive business models are removing market entry and expansion barriers, with German fintechs looking to expand beyond Germany and international Fintechs also entering the German market. Almost three-quarters of foreign fintechs are active in banking, lending, payments, and enabling processes and technology segments.
Growing Penetration of Smartphones and Increasing Digitalization Boosted the Neobanking Market
Digitalization is spreading across all industries, particularly financial transactions, and has expanded to the banking industry. Mobile payments or payments made through portable electronic devices, like a cell phone, a smartwatch, or a tablet, are an alternative to using cash, checks, or physical debit and credit cards.
Total transaction value in the Digital Payments segment crossed one by a third in 2021 and grew at a significant rate; the country had the highest number of digital commerce users within Europe in 2021. As mobile payment solutions become increasingly widespread and integrated within social media platforms, Germany is expected to see a specifically high increase in mobile POS payments.
