Aaron Holmes, CEO and Co-Founder of Kani Payments
The Promise vs. Reality
The fintech revolution promised to free banking from the shackles of legacy technology. Yet a Kani 2025 payments reconciliation survey revealed a startling truth: today’s neobanks are trapped in the same operational marsh that has long plagued traditional institutions.
Despite positioning themselves as technology-first disruptors, 50% of UK neobanks still rely on spreadsheets for crucial reconciliation and reporting functions. Even more concerning, only 22% have achieved fully automated workflows. This manual dependence creates cascading operational challenges that mirror those of traditional banks, with teams spending upwards of 700 hours annually on data preparation and 82% routinely missing reporting deadlines.
The implications extend far beyond inefficiency. Nearly 80% of UK neobanks admit that fundamental processes like matching cross-currency transactions, reconciling different payment channels and managing chargebacks are unnecessary time drains. More concerning still, 50% report that reconciliation and reporting errors create compliance risks, while 44% believe these issues undermine market trust—the essential commodity neobanks need to compete with established players.
The Hidden Crisis
Our survey reveals a sector at a crossroads. Although neobanks have built their reputation on technological superiority, the reality is more complex. Even among those using partially automated solutions (44% of respondents), challenges persist with data consistency and back-office scalability. This technological debt is particularly problematic for a business model based on lean, agile operations. Unlike traditional banks with substantial financial resilience, neobanks compete primarily on the promise of lower costs and superior user experience.
Despite 86% of institutions conducting recent back-office assessments, inefficiencies persist without a clear path to simplification. The underlying issue lies in bespoke, layered workflows built continually to address evolving demands. Yet surprisingly, only 19% of respondents attribute process issues to inadequate software and tools, and nearly half (47%) believe their processes are as fast as possible—revealing a concerning blind spot in how institutions view their operational capabilities.
Looking ahead, the solution lies not in incremental improvements but a fundamental transformation of financial control processes. Technology alone isn’t a silver bullet: even fully automated solutions create challenges with high transaction volumes (28%) and managing chargebacks and disputes (21%). Success requires a more nuanced approach that combines automation with a deep understanding of payment operations.
The Path Forward
As traditional banks continue their digital transformation journeys, the technological advantage that once set neobanks apart is narrowing. Without addressing legacy technology challenges, today’s digital banking innovators risk finding themselves in the same position as the traditional institutions they sought to disrupt, restricted by outdated systems that impede growth and innovation.
The message is clear. Even as neobanks push the boundaries of consumer banking, many are held back by surprisingly conventional operational challenges. Addressing these issues isn’t just about efficiency—it’s about fulfilling the promise of truly modern banking infrastructure. The future of banking demands nothing less than complete modernisation of financial control processes, ensuring that today’s innovative financial institutions can deliver on their promise of technological superiority and operational excellence.
