FinTechs and neobanks now account for about 17 per cent of the global banking industry’s revenue, eating into customer trust, something that used to belong almost entirely to high-street banks. McKinsey’s Global Banking Annual Review 2026 calls this one of banking’s biggest disruptions in the last two decades.
Much of that shift comes down to two simple things digital banks have offered. The first is transparency about what customers are actually being charged, and the second is reliability, which comes in the form of an app and a 24X7 support line that works when something goes wrong. It also comes down to a basic distinction. A digital bank is not a traditional bank with an app added on. The major differentiator is that it is a bank designed around the app from day one, in its onboarding and everyday journeys. That distinction shows up clearly across several digital banks that started small and are now full-blown financial relationships for millions of people.
“The digital banks that won globally did three things differently: Low cost customer acquisition through virality, deep customer centricity (innovative products co-created with customers, transparency etc.), and structurally lower cost to serve. 79% of Monzo’s new customers joined through word of mouth,” said Anshuman Upadhyaya, Managing Director & Partner at Boston Consulting Group (BCG).
Also, digital banks didn’t just take a slice of an existing market. They typically opened up a segment that legacy banks had left underserved. “There was a clear gap in the market that the traditional banks were not able to address profitably, especially the mass retail consumer segment and the underserved MSME segment,” said Rakesh Pozhath, a partner at Bain & Company. That gap is exactly where banks like Nubank, Revolut, Chime and Monzo built their first customers.
Take the example of Nubank. It grew by going after Latin America’s underbanked population, a segment big legacy banks had largely ignored, and today counts around 135 million customers across Brazil, Mexico and Colombia. Monzo, a UK challenger, turned a simple app and a coral-pink debit card into 12 million loyal customers, and recently posted its first full year of profit.
“Nubank serves a customer for under a dollar a month which is 10% of its competitors. And customer centricity must be operational, not promotional. For example, Monzo publishes its outages on a live status page, accepting the reputational cost of looking less reliable in exchange for being believed. Its NPS is 76, against an industry average of 30. Trust is shifting because customers now price opacity, and that repricing is structural, not a passing trend,” Upadhyaya further said.
Revolut, out of the UK, took a different route, building a multi-currency, travel-first app that people used alongside an existing bank account. It now has over 80 million customers and secured a full UK banking licence in March 2026, after years of running as an e-money firm.
Chime, in the US, built its entire model without owning a banking licence of its own, running on partner banks in the background. It has still become the largest digital bank in the country with around 20 million customers.
What made that growth possible, according to Pozhath, was a focus on customer experience and cost. “Every journey they do is tailored with that Gen Z, Gen Alpha customer in mind. Not too many products – start with one product, make that successful, before you get to the super-app concept,” he said.
This is why Nubank began with a single no-fee credit card and Revolut with a multi-currency card, long before either added loans, investments or insurance. The other half of the equation is cost. “The ones who have been successful have been able to maintain, depending on the market, two to seven times lower cost-to-income ratios,” Pozhath further said, largely because digital banks run without physical branches, keep their product range deliberately narrow, and build on a leaner technology stack.
None of these digital banks won by taking on a legacy bank head-on. Instead, they became somebody’s second account first, solving one job well whether it was travel spending, everyday transactions, building credit, and deepened the relationship from there.
This is not a story of apps beating branches, though that is a part of it. In the UK, bank, building society and credit union branches reportedly fell 34 per cent between 2019 and 2024, from over 10,000 to under 7,000. That decline has run alongside two other trends nearly every developed market has seen at the same time, namely rising per capita incomes, and smartphone penetration climbing close to saturation. More money, more phones, fewer branches added to the popularity of digital banks.
This raises an obvious question for India. On paper, several of the same ingredients are already in place, and arguably more advanced than they were in those markets when digital banks first took off. India runs one of the world’s largest real-time payments network in UPI. The country has pushed smartphone ownership deep into small towns and villages, and has an entire generation of customers who now expect banking to work the way food delivery or ride-hailing apps do – instantly, on a phone, with almost no paperwork.
What India hasn’t done yet is build a bank the way Nubank, Revolut, Chime and Monzo were built. This means a bank that is designed for digital from day one, not a traditional bank with an app bolted on. So does India have the infrastructure to support a digital bank? It would be safe to say that it does. The one this series turns to next is whether India is ready to build a bank around it.
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