Europe’s neobanks outpace older banks in app adoption

A new study examining the use of banking apps among European customers has revealed that users prefer neobank offers, and that their use of the technology exceeds offers available from traditional incumbents.

The study of Google Play Store downloads, conducted by App Radar, has shown that of the apps analyzed, neobanks have made the biggest gains in 2022. Atom Bank has seen app downloads increase by 101%, Viva Wallet by 54%, Tandem Bank by 53% , Monzo with 49%, Revolut with 31% and Metro Bank with 28%.

More customers download neobank apps than older system banking apps

UK neobanks have slightly outperformed their European counterparts with UK neobank Android downloads increasing by 15% in 2022, while European neobank downloads increased by 10%. Combined, both European and UK neobanks have increased their Android users by 11%.

But the reports show that legacy banks, on the other hand, have not received as many Android downloads as neobanks in 2022. European and UK banking apps decreased by 1.5% in 2022 in the Google Play store compared to 2021. But UK legacy banks have added more Android users in 2022 (10% more compared to 2021) than their European counterparts (down 8%).

Overall, app downloads for Android banking apps increased by 5% in 2022 compared to 2021.

Swiss legacy banks do better with app downloads

Swiss legacy bank UBS has seen the biggest growth with 79% more downloads in 2022, while UK legacy banks Lloyds, Halifax and HSBC saw gains of 16%, 12% and 12% respectively.

In terms of downloads in 2022, Revolut has increased its user base the most with 8.5 million downloads followed by Credit Agricole with 1.6 million, Monzo Bank with 1.5 million, Santander with 1.4 million, Intesa Sanpaolo with 1.2 millions.

The most popular apps in terms of estimated lifetime downloads (as of 31 December 2022) are Revolut with 26 million followed by Credit Agricole with 13 million, Barclays with 11 million, Santander with 10 million and Intesa Sanpaolo with 9.7 million.

Silvio Peruci, CEO, App Radar, said: “After a brief decline in 2021, the fintech banking sector continues its upward march. 2022 saw a 5% increase in banking app downloads (26 million) from 2021’s 25 million. In general, neobanks have made the biggest strides, especially when you look at percentage growth with an 11% increase over 2021. Additionally, the majority of the top ten banking apps that experienced growth in 2022 are all neobanks: Atom Bank, Viva Wallet, Tandem Bank, Monzo Bank, Revolut, Metro Bank, First Direct and Monese.

“This shows that while legacy banks may still have a larger overall market share than neobanks, the gap is narrowing and competition is increasing.

“British legacy banks’ gains are smaller when you look at percentage growth. However, none of the previously analyzed banks experienced a decline, which indicates that they are constantly adding new younger customers or converting existing customers to mobile banking.

Peruci added, “We’ll have to see how these apps fare in 2023, but with the ongoing cost of living crisis, both sides of the market will have to zero in on user acquisition strategy. With more choices available than ever to consumers, businesses will have to fight for new users with innovative functionality and smart marketing techniques to attract and retain users.”