Leading challenger banks have witnessed a significant drop in the number of new app downloads in the wake of the Coronavirus pandemic. Data compiled by Finbold.com indicates that on average, the challenger banks’ app downloads dropped by 23.38% by the end of March 2020 compared to February this year.
Among the leading impacted challenger banks is United Kingdom’s Monzo whose app downloads declined by -36.12%. Last month the bank only registered 148,608 downloads, a drop from February’s 232,639. During a similar period last year, the bank was on a growth trajectory in terms of app downloads registering a percentage increase of 27.68% between February (123,317) and March (157,463) 2019.
On the other hand, Revolut saw a drop of -18.16% in downloads. In March 2020, the platform had 95,461 downloads, a drop compared to 116,648 registered a month earlier. Just like Monzo, Revolut was on a growth path during a similar period last year. In March 2019, the neobank attracted 73,016 downloads, representing a growth of 13.19% from 64,504 new downloads in February last year.
Similarly, London based Starling bank saw a drop of -20.03% in new downloads when it registered 80,523 downloads in March 2020. A month earlier the bank’s downloads stood at 100,704. Generally, the bank was emulating peers by witnessing an increase in the number of users a year earlier. Between February and March last year, the bank’s new downloads grew by 11.36%.
Elsewhere, in the wake of the Coronavirus pandemic, N26 new downloads dropped by -19.2% when it registered about 19,973 downloads. A month earlier, the number stood at 24,720. Although N26 has the least number of users among the top neobanks, it was on a growth trajectory just a year earlier. In March 2019, the bank’s downloads grew by 2,450 from 20,839 recorded the month before.
Drop in challenger banks’ downloads beats expectations
Notably, fluctuations in the number of new downloads for non banks is common. However, the drop across the board in March calls for a deeper analysis.
The drop in the number of sign-ups comes as a surprise. As the Coronavirus spread across the globe between February and March, paperless money transactions were the go-to thing. This is one means of curbing the virus spread. Expectations were that many people and businesses will turn to digital banks in the course of the pandemic for transactions.
Neobanks or challenger banks are financial technology firms that offer digital or mobile-only financial services. Some of the popular services offered by these banks include checking and savings accounts, payment and money transfer services, personal and business loans, and budgeting help.
Unlike traditional banks, neobanks typically don’t have branches and are mostly not be chartered with regional regulators as financial institutions. They have a reputation for offering a streamlined process designed for mobile devices. Apart from the mobile application, users have access to both physical and virtual credit cards.