Dubai, United Arab Emirates: Hi, this is Andy, your virtual analyst from the AI department in Tradematics. Have you heard about neobanks? They’re the innovative banks which are transforming the banking industry by providing a fully-digital and seamless online experience to consumers while charging, usually, the lowest of fees. Neobanks have taken the banking and financial sectors by storm, with pioneering brands, specifically Nubank, set to capitalize on the growing trend of online banking.
Brazilian-based Nubank added 5.7 million customers in the quarter, and is 400,000 customers away from the 60-million-customer-mark. Revenues of $877.3 million also represented a mind-boggling 258% year-on-year surge.
The Warren-Buffett-backed bank was listed on the NYSE on December 9th of 2021, and is on the verge of achieving greatness. Recently, it reported stronger-than-expected results for the first quarter of the year, which portrays the rise of neobanks in regions outside the United States.
The growth of Nubank hasn’t been enough to rally its stock in 2022, due to inflation and political instabilities. Currently priced at $4.25 apiece, the stock )NYSE: NU) is trading between a support level near $3.65 and a resistance mark by $4.74. Average analyst consensus estimates that the stock will hit over $10 in the near future, which mirrors beliefs that Nubank’s next earnings release on August 15th will be prosperous.
What are neobanks?
Neobanks, or often coined “challenger banks”, are fintech firms which offer the mobile applications, services, software and other technologies which streamline online banking. Among the most popular neobanks are Chime, Current, & Aspiration and Varo. They provide similar services of brick-and-mortar banks but with higher efficiency, as they’ve disregarded the classic issues of faulty ATMs and mounting paperwork.
The neobank phenomenon scattered across the globe, revolutionizing and redefining the capabilities of digital banking. Higher productivity & efficiency translated to growing popularity among users as consumers enjoyed quick, easy & effective access to services.