Digital Banks

Part
01
of four
Part
01

Top Business Focused Digital Banks, Part 2

Features and functionalities for N26, Revolut, Monzo, Starling, SalemFive, Radius Bank, E-Trade Bank, Capital One 360, CIBC Bank USA, and CBD Now digital bank have been compiled in Rows 13-22, Column C and D of the attached spreadsheet.

Top Business Focused Digital Banks

For each of the banks compiled in the first part of this research, we provided the features and functionalities specifically related to business focused digital banking:
  • N26 offers a free business MasterCard, direct reinvestment with 0,1% cashback, automatic categorization of expenditures, transaction tagging and exporting, and banking on the big office screen in offices.
  • Revolut offers a global business current account for easy international payments, with prepaid business cards and an Open API.
  • Monzo claims to be tailoring Business Accounts to each individual business — the company is asked to register their interest in opening a bank account with Monzo on the website, after which Monzo looks into the company data and tailors the offering accordingly.
  • Sterling offers no monthly fees, possible cash deposits, Xero and FreeAgent integration, categorized transactions, CVS exports, connecting to the personal account possible, and flexible overdrafts.
  • SalemFive's digital business banking offering includes checking accounts, savings and Money Market accounts, loans and lines of credit, sweep accounts, zero balance accounts, and business services including employee banking, cash management, merchant services, and payroll services.
  • Radius Bank's offering includes deposit accounts, online banking, cash management, and operating accounts.
  • E-Trade Bank's digital banks offering allows for brokerage accounts, core portfolios, custodial accounts, traditional IRA, Roth IRA, and rollover IRA.
  • Capital One 360 offers a business savings account and Capital One 360 checking accounts.
  • CIBC Bank's digital banking for businesses includes commercial lending, commercial real estate, treasury management, capital markets, corporate retirement plan services, and specialty banking.
  • Some offerings from CBD digital bank include checking accounts, savings and deposit accounts (Fixed Term Deposit, Investment Account), and several business cards.
Part
02
of four
Part
02

Top Consumer Focused Digital Banks, Part 2

Discover bank offers checking accounts, savings accounts, money markets, IRAs, credit cards, personal loans, student loans, deposit products, and home equity loans. On the attached spreadsheet in rows 2-11, columns C-D the requested information surrounding the top ten consumer focused digital banks can be found.

BANK OF AMERICA

  • Bank of America offers checking accounts, called Advantage Banking Accounts, that provide access to online banking, mobile banking, text banking, together with a debit card with Total Security Protection.
  • It provides savings accounts for customers that allows them to save for their children, called Child Savings Account.
  • Rewards Saving allows the customer to enjoy many benefits when saving using the Bank of America.
  • It provides IRAs that allows the customer to choose the retirement fund they want using the Bank of America's IRA or Merrill Edge's IRA.
  • CD Accounts to help users pay the down payment for their home or family vacation easily.

ITAU UNIBANCO

  • It has the Investimento 360 system that offers investments in savings accounts, bank CDs and fixed income, investment funds, the stock market, direct purchases of government securities (Tesouro Direto), and private pension products.
  • Itaú Unibanco's Investimento 360 is an open investment platform that provides a full advisory service which analyzes and recommends the best investment products on the market.
  • Customers can choose the investment they prefer based on the bank's recommendation on the Investimento 360 platform.

ALLY FINANCIAL

  • Ally Financial offers checking and savings accounts, CDs, IRAs, credit card, auto loans, and home loans.
  • This online bank offers higher rates because the money to open branches is used to increase the rates with the interest compounded daily.
  • The savings account allows customers to earn a higher rate than traditional savings accounts with no monthly fees for customers.
  • CDs offer automatic renewal at maturity so customer can get easier time about their deposit.
  • The checking and money market have a system where users do not have to pay monthly maintenance fees or minimum opening deposit.
  • Its IRA system is FDIC-insured.

SIMPLE

  • This bank offers Trackable Spending, a system that tracks where the customer's money goes, a feature called Goals that enables the user to save money and work towards their financial goals, a built-in budgeting platform, called Safe-to-Spend, that allows people to budget their income.
  • It offers mobile banking with savings account and checking account that gives access using Simple app to users' Visa cards, photo check deposit, direct deposits, third party payments, and instant transfer.

DISCOVER BANK

  • This bank offers a range of online banking products including checking accounts, savings accounts, CDs, money markets, and IRAs plus, credit cards, personal loans, student loans, deposit products, and home equity loans.
  • Checking accounts are equipped with Cashback Debit, that rewards users, not charged without monthly fees.
  • Savings account that allow users to save their money easier and has more with competitive rates. Personal loans where users do not have to pay an origination fee.
  • Student loans that allow users to get loans with good rates for college and graduate school. These loans have no fees and provide a cash reward when getting good grades.
  • Its home loans have no application or origination fees. It has Discover Card that allows users to get cash back and earn on purchases.

CAPITAL ONE

E.SUN BANK

  • E. Sun Bank provides various types of deposits and provides syndicated loans, residential mortgages, domestic remittances, unsecured personal loans, corporate loans, commercial acceptances, domestic guarantees, and credit cards.
  • For digital banking this company's combined concept to make a system with digital marketing that solves customers' problems in a better way and provides them with a better experience when applying for loans, mortgages, check deposits, and access credit cards.
  • E. Sun was able to shorten the customers' waiting time and fund acquisition time when accessing the features of this bank.

AXOS BANK

  • Axos Bank offers a reward checking account with up to 1.25% interest, low to no monthly maintenance fees, get cash back rewards, and unlimited domestic ATM fee reimbursements.
  • Its savings account require no monthly maintenance fees and a minimum balance requirement with big returns.
  • CDs that allow users to choose flexible terms between 3 to 60 months and FDIC-insured to the maximum allowable limits.
  • Its IRAs require no annual fees, are FDIC-insured, and interest is compounded daily.
  • Its home purchase loans offer professional advice and low fees. The personal loans require no collateral. The auto loans have more advantageous terms and a lower monthly payments.

WEBANK

  • The WeBank app offers small personal loans that allow customers to click using QQ or Wechat and takes 5 seconds for valuations and one minute for funding with no penalty.
  • It offers auto loans with easy application system using an ID card, mobile number and driver's license photocopies.

TINKOFF BANK

  • Tinkoff Bank is a neobank that offers online retail financial services such as debit and credit cards, savings and deposit accounts, mortgage and loans, insurance, among others.
  • Its debit cards system is a gateway to bank's system and can be used to buy securities, take out cash loans, receive a salary, among others.
  • Users have access to eleven different mortgages and Tinkoff Investment gives users access to securities online.
  • Tinkoff Insurance has a customer centered system so users can choose the insurance that best fits them.
  • Tinkoff Travel allows customers to book airplanes and hotels.
Part
03
of four
Part
03

Top Consumer Focused Digital Banks, Part 1

Bank Of America , Itaú Unibanco , Ally Financial , Simple , Discover Bank, Capital One, E.SUN Bank, Axos Bank, WeBank , and Tinkoff Bank are the top ten digital banks globally focused on consumer banking.

The link to the spreadsheet is here.

Overview

  • Consumer banking is also known as retail banking and offers services such as savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit (CDs) to individual clients.
  • Digital banking offering products to customers through various secured digital channels and by integrating online (internet) and mobile banking services by the adoption of the latest digital technologies like analytics, social media, innovative payment solutions, and mobile technology.
  • A neobank is a type of direct bank that is 100% digital and reaches customers on mobile apps and personal computer platforms only and does not operate traditional physical branch networks.

TOP TEN DIGITAL BANKS GLOBALLY FOCUSED ON CONSUMER BANKING

1. Bank Of America

  • Bank of America has 37 million digital banking users including over 26 million active mobile users.
  • Through the bank's consumer banking segment, it offers credit, banking, and investment products and services to consumers through their digital and mobile channels.

2. Itaú Unibanco

3. Ally Financial

  • This online bank's notable features include interest-bearing online checking account, with no monthly maintenance fees, 24/7 live customer support, Zelle integration, and free ATMs on the Allpoint network.

4. Simple

5. Discover Bank

  • This bank offers a range of online banking products including checking, savings, CDs, money markets, and IRAs.

6. Capital One

Capital One offers bank accounts, credit cards, auto loans, and an investment platform.

7. E.SUN Bank

E.SUN Bank provides various types of deposits and provides syndicated loans, residential mortgages, domestic remittances, unsecured personal loans, corporate loans, commercial acceptances, domestic guarantees, and credit cards.

8. Axos Bank

Axos Bank offers rewards checking account with up to 1.25% interest, low-fee loans, and even online business banking.

9. WeBank

Named after WeChat, this online bank offers small personal and auto loans and investment products.

10. Tinkoff Bank

Tinkoff Bank is a neobank that offers online retail financial services such as debit and credit cards, savings and deposit accounts, mortgage and loans, and insurance among others.

Your Research team applied the following Strategy:

Initially, we made sure to define the two terms involved in this request — Consumer and Digital. We found out that consumer banking is also known as retail banking and offers services such as savings and checking accounts, mortgages, personal loans, debit/credit cards, and certificates of deposit (CDs) to individuals. Digital banking, on the other hand, offers products to customers through various secured digital channels and by integrating online (internet) and mobile banking services by the adoption of the latest digital technologies like analytics, social media, innovative payment solutions, and mobile technology. We also discovered another term related to 'digital bank' — 'neobank'. A neobank is a type of direct bank that is 100% digital and reaches customers via mobile apps and personal computer platforms only and does not operate traditional physical branch networks.

Then, we proceeded to identify the world's top ten digital banks focused on consumer banking, based on assets. Here, we restricted our search for banks that were digital only and offered on consumer products and services. First, we looked for precompiled surveys, research reports, and statistics that lists the top digital consumer banks in the world based on assets. Following this, we looked into firms such as Deloitte, PwC, Statista, KPMG, EY, and Gartner among others and press release distribution sites such as BusinessWire, PR Newswire, PRWeb, among others as they typically publish research analysis reports. Here, we found several reports which mostly dealt with digital banking trends. We found a few precompiled lists, however, some of it focused on digital banks while others focused on consumer banks. We found one report from Global Finance which identified the best digital consumer banks regionally and globally, however, some of them transact in their physical branches. Plus, all of these reports contained the lists that were chosen based on other criteria and not assets.

Secondly, we tried looking at market reports as these contain information about the key players. IBISWorld, Grand View Research, Allied Market Research, and GM Insights are some of the sources we looked into. Here, we only found reports which talked about digital and consumer banking separately. The online banking market reports have the segmentation by banking type- retail banking, corporate banking, and investment banking, however, the list of banks under the retail banking cannot be accessed because all of these reports were under a paywall. Plus, all of these reports did not specify that the leaders were chosen based on assets.

Thirdly, we looked into different sites that ranked the best or top digital consumer banks in the world based on assets. Sites varied from ranking sites, business sites, banking sites, consultancy sites to blog sites. These include fintechnews.hk, thefinancialbrand.com, thebalancesmb.com, ranker.com, inc.com, Banking.com, Business Insider, Fortune, Forbes, among others. Here, we found lists of the digital banks but not specified if they're consumer-focused. We also found lists of the consumer banks, but it was not specified if they're neobanks.

Since we were not able to find a precompiled list of the top digital consumer banks in the world based on assets, we decided to triangulate the information. We used all the resources mentioned above and collected all the neobanks that were consumer-focused, in a spreadsheet and looked for their assets. Please see the steps below:

Step 1

We created a spreadsheet for the list and set the criteria for the banks to be included in the list. The criteria included:
  • The bank should be offering products to customers through various secured digital channels and by integrating online (internet) and mobile banking services.
  • The bank should be consumer-focused and must not offer corporate products and services (services limited to savings and checking accounts, mortgages, personal loans, debit/credit cards and certificates of deposit).
  • For the banks that offer corporate products and services, we made sure that most of its services and highlighted products were for retail.
  • We also included banks from all across the world, since this is global research.

Step 2

For the survey and market reports specifically from Google Finance, we chose the best consumer digital banks regionally and globally. We included them since they were chosen "based on strength of strategy for attracting and servicing online customers, success in getting clients to use digital offerings, growth of online customer base, breadth of products offered, evidence of tangible benefits gained from digital initiatives, and website design and functionality." We checked their websites, Bloomberg and LinkedIn profiled to double check their business nature. What's left to do here was to find their assets to see who were the top based on the research criteria.

Step 3

For the lists, we found the top-ranked consumer banks and digital banks separately and picked those on their top 10 as these were already the best. We checked their websites, Bloomberg and LinkedIn profile to check their business nature to see if they were digital that offer consumer or retail products only.

Step 4

After compiling the list, we looked for their consumer or retail banking assets, but some of the banks, usually those which were still in the early phase of their business models and are continuing to fundraise, did not have assets publicly. Therefore, we looked for their revenue or income and transaction value or total amount fundraised to equate for consumer banking assets as these amounts similarly provide the valuation of these companies.

Step 5

After accruing information regarding revenue or assets, we then ranked them from highest to lowest and picked the top ten and provided the features and functionalities on the spreadsheet.
Part
04
of four
Part
04

Top Business Focused Digital Banks: Part 1

The top ten business banking focused digital banks globally are N26, Revolut, Monzo, Starling, SalemFive, Radius Bank, E-Trade Bank, Capital One 360, CIBC Bank USA, and CBD Now. We compiled the full list, as well as the assets for each bank (if available) and the features available from each bank, in rows 13-22 of the attached spreadsheet.

Top Business Focused Digital Banks

The top ten business banking focused digital banks globally are:
  • N26 (Assets not available as the company is a private company and considered to be a start up, N26 raised £387 million to date)
  • Revolut (Assets not available as the company is a private company and considered to be a start up, Revolut raised £263 million to date)
  • Monzo (Assets not available as the company is a private company and considered to be a start up, Monzo raised £180 million to date)
  • Starling (Assets not available as the company is a private company and considered to be a start up, Starling raised £133 million to date)
  • SalemFive ($5 billion in assets)
  • Radius Bank ($1.3 billion in assets)
  • E-Trade Bank ($49 billion in assets)
  • Capital One 360 ($12.56 billion in assets)
  • CIBC Bank USA ($17.7 billion in assets)
  • CBD Now ($10 billion in assets)

RESEARCH METHODOLOGY

Our research approach to understand digital banks which are business focused had to be creative, as none of the pre-compiled lists we were able to find listed digital banks by their size, neither in revenue, assets, or other financial statistics. The reason for this is the fact that the concept of digital banks is still in its infancy and therefore, many banks that are purely digital are still small start-ups.

First, we looked into credible financial media sources such as Forbes and Business Insider to understand the market of digital banks. According to Forbes, the concept of digital banks is soaring in Europe while it is still on very shaky legs in the US. Forbes listed the four digital banks which are currently considered to be doing the best in the business world as the ones to watch and learn from. These banks are N26, Revolut, Monzo, and Starling. All four banks are still considered start-ups, and we were only able to quote their total funding amounts up to date, as neither of the banks quotes their assets as of yet. The reason for this is the fact they are still small, independent, and private start-ups which are not required to do so. The reason why we included these companies in the list is the fact that Forbes quotes them as most successful digital banking concepts. We further checked that all four banks operate in the US and globally, and that all four banks offer business accounts and have quoted to be business banking focused. It is also stated that these are the only four digital banks outside of the US which are currently operating without struggles.

As we have exhausted all digital banks based in Europe, we shifted our focus to identifying digital banks based in the US. For this approach, we looked into the digital banks that are considered to be best-ranked in the US. The top 10 digital banks based in the US, according to a banking-focused source, are as follows:
Therefore, with the second approach, we were able to identify five additional digital banks that are business banking focused. For these five banks, their assets were publicly available and have been listed in the spreadsheet.

In order to list ten digital banks as required in the research criteria, we consulted an additional pre-compiled list of digital banks to watch in 2018. In the list, 25 banks are listed, and many of those have been mentioned in the list of the top 10 digital banks already exhausted in step two of the research. The remaining banks in the list are not business focused, except for Commercial Bank of Dubai, which has its own digital bank with a heavy focus on business banking. Therefore, our last bank to be included on the list is CBD Now.
Sources
Sources

From Part 02
Quotes
  • "We offer our customers a full range of investment products and we are one of the leaders in the asset management market."
  • "We offer our customers the Investimento 360, an open investment platform providing a full advisory service, analyzing, selecting and recommending the best investment products in the market, whether Itaú Unibanco products or those of other institutions, with total transparency."
Quotes
  • "We're an online bank, so instead of spending money on expensive branches, we pass the savings on to you. You get the benefit of rates that are consistently competitive, so you can make your savings work harder. Interest compounded daily. We grow your money faster with interest compounded daily"
Quotes
  • "Every aspect of a Simple checking account is optimized for branchless, online banking, so you have access to each feature wherever you happen to be, whenever you happen to need them. Without setting foot in a bank (or a bank stuffed into an ill-fitting mobile app), have constant access to:"
  • "Visa® Debit Card Photo Check Deposit Direct Deposit External Account Linking"
Quotes
  • "Scenario-based finance: Incorporating banking services into customers' daily lives. Starting from customers' perspective, we combined design concepts into digital marketing to solve customers' problems, create new experiences, and establish scenario-based finance."
From Part 03