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Another neobank? Not really

Updated: Apr 14, 2021

When mentioning 'fintech', most people will probably think of brands like Revolut, Monzo, Starling and Chime, the so-called 'challenger', or 'neo' banks. While these companies have undoubtedly been leading the way in the industry over the past few years, we're now starting to see a new wave of fintechs ready to take on their well-established rivals by taking some rather different and unusual approaches to product development and marketing positioning.

In today's post, our contributor Araminta Robertson, Fintech Copywriting Specialist at Mint Studios, has prepared a list of 5 of the most interesting and exciting emerging fintechs out there.

Another neobank? Really?

Anyone who consumes Fintech news or is in the Fintech world has thought this at least once. We see the words “app-only bank” “a new way of banking” “take control of your money” and “banking, but better” and we start thinking that really, there are too many of them.

But the truth is: there aren’t. In fact, in this article, I make the case that there aren’t enough! There are still many customers that are underserved and underbanked, and still a lot of work for neobanks and Fintechs to do. As you’ll see from this list, there are many different ways neobanks and Fintechs can serve customers. Many of the smaller neobanks simply don’t get as much attention as the Revoluts, Chimes and Monzos of the world. 

I put together a list of neobanks that are doing things differently, whether it’s through their product, their target market, or their marketing strategy.

Cleo is an AI-powered chatbot that works as a neobank. You chat to “Cleo”, an intelligent assistant who helps you manage your money. Cleo is based in the UK, but has since expanded and seems to be more popular in the US.

Personally, I’ve been a fan of Cleo ever since I discovered them over a year and a half ago. They aren’t mentioned in many Fintech lists, and yet I feel their product is incredibly unique and forward thinking. Cleo has truly redefined what banking is: instead of entering an app, checking your money, searching for transactions and sending money to friends, all you need to do is ask Cleo a couple of questions and she’ll do the legwork. Ask her questions such as “do I have enough money for pizza tonight?” or “can I afford a new coat?” and she will give you a response based on the data and how you’ve configured her. 

Many Fintech thought leadership articles talk about how the future is all about data analytics and chatbots. One reads those articles and then things: yes, this is the future. In the future, I won’t need to search, click on buttons, or figure out how to use a product. I will simply ask a chatbot, and they will guide me. 

But it’s not the future, it’s the present. Neobanks like Cleo are taking AI and chatbotting seriously and it’s incredible to watch. The technology is here, but the reason it hasn’t caught on is because the customer base isn’t ready yet. We’re not used to interacting with chatbots and many still think advanced Fintech is Revolut or Monzo. I’m here to say that advanced Fintech is an app like Cleo. 

For any Fintech and tech nerds out there, I urge you to download Cleo and play around with it. You’ll be able to see the power of AI and chatbots right in front of your eyes (and no, I am in no way affiliated to them 😉).

Their Instagram is hilarious.

I watch many Fintech webinars (and host them too) where everyone says that Fintech is about serving the underserved and the underbanked. Many Fintechs are doing a great job at serving the underserved, but there aren’t so many that are approaching the underbanked. This may be because the underbanked are harder to reach, not as profitable or not possible to serve due to being mostly cash heavy.

Pockit is an example of a Fintech that is serving the underbanked. Pockit is a UK neobank that targets people who have difficulties opening an account, or have been “ignored or rejected by the high street banks”. This may be immigrants, people living on benefits or people who have an incredibly low credit score.

Pockit allows users to get their benefits and wages directly paid into their bank account, and offers “PayPoints” all across the UK where Pockit users can pay cash into their accounts. They also offer online transfers, savings products and many other useful neobank features.

Pockit may not be very different to Monzo or Starling feature-wise (you can aso pay cash into your account with Starling, for example), but they are different with their branding approach. They make it quite clear who they are targeting, with their marketing and content production directed towards the underbanked. This helps build trust with the target market because they feel identified and part of a community. Yet another reason why it’s SO important to have a clearly defined “ideal customer” (here’s how I do it).

I think Pockit is doing an amazing job at helping those that need help the most. I am not a user myself so I cannot tell what the customer experience is like, but if the reviews are accurate it seems they offer a much needed product.

Karat is a neobank based in the US that specifically targets content creators.

This is another neobank with a unique target market and branding strategy. On their website and Notion blog, they explain that many creators are left behind by big banks - these are creators who are entrepreneurs, influencers and people who make most of their money online. Due to the unique nature of their business, it can be hard for them to get mortgages, credit cards and business loans. What does a bank do with someone who has 500,000 Instagram followers but a short credit history due to their age? Or an immigrant who has over 1 million Youtube subscribers but cannot have access to US credit cards? 

Karat aims to cater to this market with very unique features. For one, the Karat card offers better perks the better your social stats and the higher your income. If you have a following of over 100k, they will prioritize you and offer you better features. 

Forget about the social security card or credit score. Instead they will ask for:

  • Your Instagram follower count

  • How many sponsorship deals you get

  • Your Youtube subscriber count

  • Donations on Twitch

  • A lot more

You can also design your bank card as you wish. Their tagline sums it up pretty well: “a card based on your social stats”.

They have several famous creators that are already part of their user base, including TheRussianBadger (YouTube: 2.7M, Twitch: 380K), Nas Daily (Facebook: 15M, Instagram: 1.8M), and TierZoo (YouTube: 2M). Their average creator has more than a million followers!

For the moment, Karat is a pretty unique product targeted to a very niche target market. But I believe we’ll only be seeing more of this in the future: products based on what you’ve achieved, your identity and personalized according to what you specifically need. Remember how I said that the opportunities with Fintech are endless? Karat is the perfect example of a target market that is still underserved.

Qube is a neobank based in the US that focuses on helping users budget their finances carefully.

As an ex-personal finance blogger, I can tell that Qube is every personal finance nerd’s dream. Instead of categorising your expenses after you spend, Qube puts your money into various categories (they call it Qubes) before you spend. That means that you have several sub-accounts within your main account. Every time you spend money, you pick which category you want your money to come from. This is different to how other neobanks such as Revolut, Monzo or Chime operate.

It’s very nitty gritty budgeting, and not for everyone. But I think it’s very useful to those who are on a very tight budget (students?) or who are paying off debt. They keep track of everything you spend, and they offer the regular features that other neobanks offer such as a current accounts, savings and companion cards. This is definitely something I would have found useful when I was on a tight budget myself.

I also really like their video! 👆

Stash’s main product is similar to other advanced neobanks: they offer investing in fractional shares, personal guidance on how to reach your goals and automated features to help you save and invest.

The reason I am including them in this list is because they adopted an interesting marketing strategy throughout the Coronavirus pandemic: the Stock Party. The Stock Party is a marketing strategy they set up on Twitter: every weekday, Stash announces on Twitter that they will be giving away stock that day (in fractional shares) starting at 4pm. People can increase the "party power" by recruiting friends and encouraging more participation. The more people you recruit, the more stock is allocated to you and therefore the larger your award (everyone gets the same amount).

The Twitter hashtag #StashStockParty has helped get the word out and gone viral. It’s also been a great way to gather the community of people who use Stash. According to Stash, 65% of the participants in Stock Parties hold more investment in their portfolios thanks to the Stock Party. In addition to that, 30% of customers who received a reward then went on to make additional investments into that security. Some interesting and good stats.

Whether this is just another “free money” marketing strategy or a real strategy that works, we’d need to ask Thish and see what he says 😉. But nonetheless, it’s an interesting marketing strategy that helps increase brand awareness and brings the community together during a difficult time.

These neobanks are doing something unique and worth mentioning. Think of all the underserved markets out there. Is there a neobank catering to them? Could there be? This list only has 5 neobanks, but I know there are many other opportunities out there that could be served by innovative and customer-centric Fintechs. Because the truth is that there is still a lot of work to be done in the Fintech world - and obviously not enough neobanks!


About Araminta Roberston: Araminta Robertson is a speaker, podcaster and fintech writer who specializes in thought leadership, blog content and in-depth reports. She's the founder of the boutique fintech copywriting consultancy Mint Studios.


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