Model Behavior
“Model Behavior” – a cartoon that illustrates how Neobank’s need to evolve their fee-based business models to more service-based revenues.
New entrant banks (e.g. Revolut, Dave) entered the consumer market offering debit cards and current accounts, and then expanded into higher margin exchange fees (e.g. crypto).
While this resulted in fast customer acquisition, a fee-based business model is susceptible to competitive pressure and has low margins.
To address this, Neobanks need to move into banking services, which offer a more stable revenue stream and higher corporate valuations.
For example, providing subscription-based services that offer a bundle of services, such as MoneyLion’s Plus product that brings investing, borrowing, and checking accounts into a single, subscription-based, membership.
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