What is a neobank? The three waves explained
Ask five people what a neobank is and you'll get five answers. The word gets applied to Chime (a US app with 20M+ users and no banking licence of its own), to Nubank (a fully licensed bank serving 131M customers), to Revolut (which holds crypto for you next to your fiat), and increasingly to things like MetaMask or Gnosis Pay — apps where no company holds your money at all.
They're all "neobanks" in everyday speech, but they are structurally very different animals. At neobankbeat we track 357 verified-active neobanks, and the cleanest way to make sense of the space is to sort them into three waves.
The working definition
A neobank is a digital-first financial service that offers everyday banking — an account, a card, payments — through an app, without a branch network. That's the common core. Everything else (whether it holds a banking licence, whether it touches crypto, whether it even holds your funds) varies wildly, which is why the single word hides three distinct waves.
Wave one: the traditional challengers traditional
This is what most people mean by neobank: fiat money, custodial accounts, a Visa or Mastercard debit card, and some regulatory arrangement that lets them hold deposits. The first recognisable modern challengers appeared around 2011–2013 — Simple in the US, then Nubank (2013), and the London cluster of Monzo, Revolut and Starling in 2014–2015.
The dataset shows the boom clearly: founding activity climbs through the 2010s and peaks in 2019, with 45 new neobanks in a single year. Wave one is by far the largest group — 256 of the 357 entities we track — and contains all of the giants: Nubank (131M customers), WeBank, Chime, Cash App, Revolut.
Within wave one, the licence question splits them again:
- Licensed banks (92 in the directory) — Nubank, Monzo, Starling, KakaoBank, TymeBank. They hold a charter and your deposits sit with them directly, usually with deposit insurance.
- Partner-bank models (20 tracked) — Chime, Current, Dave, Mercury, Brex. The app is a technology company; an FDIC-insured partner bank actually holds the money. This model works, but it has real failure modes — see our post on whether neobanks are safe.
- E-money institutions — common in Europe (Wise, Tide, ANNA Money). Your funds are safeguarded, not deposit-insured.
Wave two: the hybrids hybrid
Around 2017–2020, a second wave blurred the line: fiat accounts plus custodial crypto in one app. Revolut added crypto trading; Cash App added bitcoin; exchange giants like Crypto.com, Coinbase and Binance came from the other direction and bolted cards onto their exchanges.
We track 54 hybrids. The key word is custodial: the company holds both your euros and your coins. You get convenience — one app, one card, crypto cashback — but the counterparty risk is the same as any custodian. Notable names: Revolut, Cash App, Robinhood, Crypto.com, Bitpanda, Xapo Bank (a fully licensed private bank holding bitcoin), and newer entrants like Kraken's Krak app.
Wave three: web3-native web3-native
The newest and most structurally radical wave: 47 tracked apps where the user holds the keys. There is no deposit, because there is no custodian — your money is stablecoins or crypto in a wallet you control, and the "bank" is software plus a card programme.
Think MetaMask, Phantom or Trust Wallet on the wallet side, and Gnosis Pay, EtherFi Cash, Payy or 1inch Card on the "spendable" side — self-custodial balances connected to a Visa or Mastercard rail. Of the 357 neobanks we track, 40 are fully self-custodial and 2 use MPC self-custody (like Zengo). A small subset — 12 apps — even work without any KYC, because software that never holds your funds isn't always required to identify you. More on that in the no-KYC deep dive.
This wave only became practical after 2020, when stablecoins matured and card issuers started supporting crypto-funded programmes — which is also why stablecoin cards are the connective tissue of the whole third wave.
Side by side
| traditional | hybrid | web3-native | |
|---|---|---|---|
| Who holds funds | Bank or partner bank | The company (fiat + crypto) | You (keys/wallet) |
| Balance is | Fiat deposit | Fiat + custodial crypto | Stablecoins / crypto |
| Deposit insurance | Usually (direct or pass-through) | Fiat side sometimes; crypto never | No — but no custodian to fail |
| KYC | Always | Always | Usually card-only; sometimes none |
| Examples | Nubank, Chime, Monzo | Revolut, Cash App, Crypto.com | MetaMask, Gnosis Pay, Phantom |
| In the directory | 256 → | 54 → | 47 → |
What a neobank is not
Some boundaries we enforce in the directory, because the word gets stretched:
- Not BaaS/infrastructure. Companies like Unit, Synapse or Marqeta power neobanks but aren't consumer banks. Excluded.
- Not a bank's mobile app. JPMorgan having a good app doesn't make Chase a neobank — though standalone digital brands from incumbents (Chase UK, imagin, Weyay) do count.
- Not defunct. The space has a large graveyard. We only list verified-active entities, which is why our count moves.
Where this is going
The three waves are converging from both ends. Traditional neobanks are adding stablecoin rails (103 of the 357 tracked already support stablecoins in some form); web3-native wallets are adding IBANs, card programmes and compliance. The interesting question for the next five years isn't "which neobank wins" — it's whether the custodial and self-custodial models meet in the middle, and what regulators do when they can't tell the difference. That's the tension this site exists to track.