Why financial trading the next obvious step in the neobank revolution

Andrew Grevett, co-founder and CEO of Market Dynamics


Previously, customers were limited to banking in their local high street branch. But that all changed over the last decade with the rise of online banking.

One of the biggest enablers of this has been neobanks. Far quicker, more efficient and secure than traditional banking, they provide exclusively digital services that have improved the lives of millions of people and businesses beyond recognition.

But it’s in Europe where neobanks’ benefits have been most widely felt. Serving as one of the major disruptors of financial services in the continent over the past decade, established and new players alike have quickly made their mark.

Yet, despite their rapid expansion, most neobanks have failed to make a profit. Indeed, less than five percent have broken even, according to a report by Simon-Kucher & Partners.

The problem is that, in the race to capture market share, many have spread themselves too

Andrew Grevett

thinly, too quickly. Some have focused so intently on trying to open as many accounts as possible that they have overlooked how they can make them profitable. Others, meanwhile, have been caught out by new trends that they didn’t perhaps foresee when launching their initial product.

To change this, neobanks need to look beyond pure banking and add alternative new revenue streams to their core business. One such source is financial trading services.

Trading services

Revolut was one of the first pioneers of financial trading services, launching its commission-free stock trading platform in August 2019. It has already enjoyed relative early success off the back of the launch and has quickly expanded its services to new markets and territories.

This is evidenced by the fact that the self-styled ‘financial super app’ reported its first full-year profit in 2021. More than half of its revenues came from foreign exchange and wealth services.

It seems like a no-brainer to provide these services, given that neobanks already have vast amounts of customer data at their disposal. By drawing on the insight of their customers’ financial situation and spending habits, they can offer a bespoke service suited to their needs.

Lack of provision

Many digital banks have already made big strides with their trading services solutions. But the problem is that the majority still don’t offer such a product direct to their customers. Of those that do, only half provide access to one financial instrument.

That’s because it’s difficult and complex to set up the service. First neobanks need to establish the required financial infrastructure, workflows and logic. Then they have to secure regulatory licensing in order to ensure that they stay compliant.

Partnering with fintechs

Fintech startups hold the key to overcoming these problems. By partnering with such a provider of trading services, they can deliver exactly what the customer wants, when they want it.

It’s a trend that’s already becoming increasingly prevalent. Indeed, 59% of neobanks are choosing to partner with an investing-as-a-service provider to launch new offerings, according to our recent study.

Defining period

While many neobanks may still be in their relative infancy, those more established ones are now starting to reach maturity. That’s why, moving forward, they need to have robust strategies in place to drive sustainability and profitability, thus ensuring future growth.

Technology is key to achieving this. After all, not only should neobanks provide a seamless customer journey, they must also understand their pain points and address them accordingly.

Turning technology to their advantage

Neobanks’ key strength is their ability to personalise solutions to their customers’ needs. The better the service that they can deliver, the more likely they are to retain them and, thus, to be able to deliver additional products and services.

With more satisfied customers, neobanks can drive greater growth. Greater growth translates into better profits.

Trading services have become increasingly popular in recent years. As that demand continues to grow, so neobanks need to tap into that rich resource.


Andrew Grevett, co-founder and CEO of Market Dynamics

Market Dynamics unlocks systematic trading for retail traders, simplifying a formerly complex process. An intuitive drag and drop interface makes it easy for traders of all levels of technical expertise, to quickly transform their ideas into fully automated trading strategies without the need for any coding knowledge whatsoever.


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