If you’ve ever seen a neobank in Italy or elsewhere, you’ve discovered the world of digital banks and online payments. This type of online bank is now springing up across the planet and enjoying rapid growth despite not having the physical presence of branches like traditional banks.
We’ll be looking at the data to see the top players in the Italian digital banking scene. This is part of a fast-moving trend where millions of customers manage their bank accounts from an app or website, moving billions of pounds, euros, and dollars without visiting a bank branch.
What is a neobank?
Defining a neobank is simple, as this is an online bank created for the digital age. It offers the chance to open a bank account online. Customers can then use the full range of financial services you’d expect, all from their laptop or smartphone.
This trend has reached far and wide, with a reported 85% of European adults with bank accounts now using mobile services to handle their accounts. It has led to a range of different accounts being offered, with the mission of meeting every need.
Options in Germany, the UK, and the rest of Europe
This shift towards mobile banks is a growing trend across Europe and the rest of the world. The following countries are among others with a strong neobank scene in Europe: the UK, France, Spain, and Germany. A fuller range of countries can be found by looking for new banks that have been launched across Europe, as this scene continues to grow.
Millions of people have already gotten involved with this way of handling their money online. The neobanking market in Europe is growing fast. More people are using digital services, want financial tools that fit their needs, and benefit from open banking. In 2023, the market was worth around €15 billion, and it could grow to about €40 billion by 2028.
Regardless of your location and involvement in business deals, you can find a smartphone app for a neobank that suits your needs. Residents of Germany, Spain, and other countries in Europe should look for a bank that serves their country but has a global reach.
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The importance of licensing
Licensing is a key aspect in the development of this industry. An online bank has to provide the same reliable operations as established banks working in the same market. This is done by obtaining an operating license or partnering with a traditional bank.
Having a license ensures they operate within the law and use customer personal data correctly. You should always check this aspect before signing up and getting involved, as the right license means you’re protected.
The development of innovative features
These digital banking companies may also offer innovative features such as mobile-first apps and virtual debit cards. This banking model has grown rapidly thanks to the way it can meet customer preferences by offering low fees and instant payments, etc. When creating a new smartphone app, these banks consider each new trend that customers might want included.
How Italian neobanks work
New users can access these digital banking services through the online sign-up process. Licensed neobank providers carry out a full know your customer (KYC) process, where they require government-issued ID to verify the identity of new users. The account opening process is completed through a mobile app interface, giving a simple way to get started at any time using a mobile device.
What financial services can be accessed in the Italian market?
Once the bank account is open, you’ll be able to access your IBAN for international transfers. After that, you can look for additional banking services like the following:
Multi-currency accounts
You can hold funds in euros, dollars, and often other currencies offered.
Budgeting tools and other financial tools
These tools let you plan your monthly payments and savings. This gives you insights rather than simple bank statements.
Cryptocurrency integration
With a rise in interest in the digital asset world, some digital banking services will give you the option of adding these tokens.
Integration with SEPA
SEPA and other instant payments may be added through digital payment APIs.
Virtual bank cards can be issued for online use
A physical card is also an option if you want to spend money in stores or take out money from ATMs around Europe and beyond.
Italian neobank market overview
Several neobanks in Italy stand out as offering the sort of financial services we’ve been looking at here. Banks such as Revolut, Tinaba, N26, Illimity Bank, and Isybank are among the leading service providers in this industry, catering to personal consumer preferences for mobile bank services that make it easy for new customers to handle their money.
The typical type of customer
While this type of business has traditionally been aimed at the market for younger customers, mobile banking services are becoming popular among customers of all ages and backgrounds. Since this country is part of the European Union, Italian neobanks can use the revised Payment Services Directive (PSD2) that permits the use of bank data by third-party service providers.
Neobanks vs traditional banks in Italy
This new way of opening and operating a bank account in Italy isn’t designed to entirely replace the existing business model of physical bank branches. Instead, it gives new customers a different way to open an account and control their financial lives. These digital service providers cater to people who need something extra or have strong personal preferences for mobile access.
More features
These companies give consumers the chance to handle their money in a way that complements the traditional banking services they already receive from other providers. It means that you can use the innovation provided by neobanks for specific use cases. Fast transfers, digital wallets, and managing their finances on the go are some of the reasons users look for neobanks in Italy.
Comparison of the main features
Banking feature | Neobanks in Italy | Traditional banks in Italy |
New customers sign-up process | Carried out online. New users upload or scan their documents to complete the KYC process. | Carried out in a branch or, in some cases, partially online. |
Banking hours | 24/7 mobile online access allows users can access their money and financial services | Business hours for visiting the branch. Many have limited online banking options. |
Account fees | Low monthly fees, or no fees for certain services in some cases. | Maintenance fees and services are often charged, fees may be higher. |
User interface | Intuitive, mobile-first interface on app or website | Generally desktop-first website with limited app functionality. The trend is for mobile banking to be added, but apps lack features. |
Account features | Consumers can access the likes of financial budgeting tools and analytics. Virtual debit cards from some providers are for online purchase use. | A range of classic banking services like loans, interest on savings accounts, physical debit cards, and so on. |
International payments | Fast transfers with low fees and better transaction rates are often offered. | Money transfers tend to be slower and more expensive, but provide more options. |
Licensing | Can be an EU license or e-money regulations. | Full banking license issued by the country, with deposit insurance in place. |
Customer support options | Live chat and the option of sending an email to the support team. | By phone or branch visit, meaning slower times for dealing with queries and issues. |
Benefits and challenges of Italian neobanks
Since the first neobanks were launched earlier this century, there have been challenges these service providers have had to meet. To fully understand the reasons for dealing with these banks, we need to look at those challenges together with the main benefits they provide to millions of users.
The key benefits of neobanks
Easy onboarding process for new users
Low fees
Efficient cross-border payments when sending money across Europe or further afield.
Fintech integration allows entrepreneurs and general consumers to handle their money effectively using the latest technology.
Their main challenges to overcome
Regulatory and licensing barriers have made their development more difficult.
There may be trust concerns, particularly with older users who worry about the use of their personal data by this type of business.
The scope of bank account services may not suit all customers.
How does Genome fit into the Italian neobanks business model?
Genome is an electronic money institution licensed and supervised by the Bank of Lithuania. Just as neobanks, Genome has a digital-first approach: all our services are carried out online, starting from a simple onboarding! Both web version and mobile app are available!
With Genome, you get the full range of essential financial services, including:
Multi-currency accounts to store funds in 12 currencies: EUR, USD, GBP, PLN, CHF, JPY, CAD, CZK, HUF, SEK, AUD, and DKK.
SEPA Instant and Credit Transfers are available to all users, allowing instant transfers within the SEPA zone.
Virtual and physical cards can be issued online with ease and linked to your multi-currency accounts.
A plethora of business services are available – from dedicated IBANs and international transfers to mass payouts and C2B2C payments.
Our API-based business services fit perfectly into the Italian neobank industry we’ve been looking at. New customers can sign up smoothly online and start spending and sending transfers as they prefer.
At the same time, we comply with the current EU regulations and support fintech growth in Italy.
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in Genome online
FAQs
Can I open an Italian neobank account as a foreigner?
Yes, you can open an Italian neobank account as a foreigner, but it depends on the specific neobank and your country of residence. Check the list of countries on the Genome site to see if you can open an account where you live. If you can, you can open accounts in euros and other currencies, allowing you to make SEPA Instant Transfers, hold funds in multiple currencies, order physical and virtual Visa cards, and so much more.
Do Italian neobanks offer multi-currency accounts?
Yes, you can open multi-currency accounts in most cases. This means that you can handle your money in euros or use other currencies like US dollars and British pounds when it suits you to do so.
Are neobank deposits insured in Italy?
If the neobank is a fully licensed Italian bank, deposits are protected under the Italian Deposit Guarantee Scheme, which covers up to €100,000 per depositor. Be sure to check that the bank you plan to open an account with is licensed in this country or the EU before you proceed.
