Indian Neo Banking Industry Outlook to 2027: Driven by Adoption of Contactless Payments, Shifting Consumer Preferences Towards Fin-Tech, Rising Market Players and Digitalization

The publication titled “Indian Neo Banking Industry Outlook to 2027: Driven by the adoption of contactless payments, shifting consumer preferences towards Fin-Tech, rising market players and digitalization” provides a comprehensive analysis of the Neo Banking industry in India. The report covers various aspects including Neo Banking industry market size on the basis of revenue, market overview, the genesis of the market, India Neo Banking industry Cycle, an overview of Neo Banking services/ Products, the ecosystem of entities in the Indian Neo Banking industry, consumption expenditure and borrowing trends, value chain analysis of Neo Bankings, growth drivers, role of Government and challenges, major trends and developments, SWOT Analysis, Porter analysis, Investment analysis and segmentation in the industry, timeline of Neo Banking industry growth, Risk Involved and COVID impact to the industry. Total addressable market, serviceable addressable market and the serviceable obtainable market has been covered in the report.

Insights on competitive landscape of Neo Banking industry, company profile of major Neo Banking players operating in the ecosystem on the basis of Company Overview, About the Company, Revenue Model, Funding and Investors, Key Features, Business and Marketing Strategies, Product Offered, Strengths, Recent Developments, Key Takeaways and Financials- FY’17-FY’21. The report also focuses on the Indian Neo Banking Market Segmentation By type of Users (Business/Domestic), By Operating Region(North, East, West, South), By Type of Application (Personal, Business, Others), By Age Group of Users (Less than 20, Between 20 and 40, and More than 40). Industry experts interviews from ZikZuk, Freo, Tide have been addressed in the report. Indian Neo Banking Market report concludes with projections for the future of the industry including forecasted industry size by revenue by 2027, and analysts’ take on the future highlighting the major opportunities.

Indian Neo Banking Market Overview and Size

Indian Neo Banking market expanded with substantial growth in between 2017 and 2022 with massive expansion in the adoption of Neo Banking as the mode of payment due to rising industry valuation, trend of contactless payments and the emergence of Neo Banking startups. The primary factors driving the market growth is the emergence of instant payment anytime and anywhere, rising internet penetration in the country, growing awareness among the users, controlled, secured and efficient transactions with the convenience of use and a highly rewarding experience provided by the market players to their users. The volume of digital payments in India grew by 33% during the financial year 2021-2022. These payments are assisted by advanced technology and are, therefore, quick, simple and convenient. When these payments are assisted by Neo Banks, they boost the purchasing power of people through partner merchants and rewards.

Neo Banks RazorPay are providing Neo Banking facilities to all kinds of Indian residents in all major tier-I and tier-II cities. On the other hand, consumers too are drawn towards digital payments due surging adoption of contactless payments post COVID-19 which is also contributing in the growth of Neo Banking market by increasing their user base. The smartphone penetration rate in India is projected to increase from 54% in 2020 to 96% in 2040.

As more and more people across India, including people in rural areas, use smartphones, they get increasingly exposed to digital payment modes.

In the wake of the pandemic, the National Payments Corporation of India (NPCI) encouraged customers and providers of emergency services to adopt digital payment systems, ensuring the safety of contactless transactions. As a result, transactions increased to some extent.

Indian Neo Banking Market Segmentation

By different Region of the country (North, East, West and South): Neo Banking market in India can be segmented basis of Region:

North, West and South regions are distributed fairly in the country on the basis of Revenue of Neo Banks in FY’21 with comparatively low penetration in Eastern region due to low internet and technology penetration

By Application of Users (Personal, Enterprise and Others): Neo Banking market in India can also be segmented on the basis of application of users:

Personal and Enterprise users constitute and market on the basis of revenue in FY’21 and personal application users are the majority of the market while the other segment includes B2B2C users

By Type of Account (Saving and Business): Neo Banking market in India can be segmented on the basis of Type of Account:

Saving and Business account Neo where Saving Account are dominating the Indian Neo Banking industry when compared to the Business Account on the basis of revenue contribution in FY’21.

By Age of Users (Less than 20, Between 20-40, and More than 40): Neo Banking market in India can also be segmented on the basis of Age group of users:

< 20, 20-40, >40. Age group between 20 to 40 captures the major market share in 2022 on the basis of revenue contribution. The major reason is high technology and internet penetration among the youth, willingness to invest from traditional form of banking, and high financial literacy.

Competitive Landscape in Indian Neo Banking Industry

RazorPay and InstantPay have dominated Indian Neo Banking Industry. However, companies such as Freo, NiyoX, FI Money, Jupiter, FamPay are disrupting the Neo Banking space by bringing new product and features in the market and bringing financial inclusivity to all sectors of society. In the last few years, Neo Banks specialized towards the needs of women, teenagers, gig economy, SMSE have been formed and offered lucrative products and scheme with the aim of expanding the financial umbrella towards all section of the soceity. These Neo Banking start-ups are associated with traditional banks to launch new products and services in the untapped market.

The Neo Banking issuing Platforms in India have raised several round of funding over the years from prominent Venture funds and Investors across the country. The Neo Banking industry has not exploited the commercial part of the banking industry and business customers still prefer traditional banking system due to high volume transactions, security issues, bank trust and more. In essence, the Neo Banking industry has a lot more potential to flourish across the country if its pain points can be resolved fast, paving the path for a robust penetration of digital banking in the country.

Indian Neo Banking Market Future Outlook and Projections

Indian Neo Banking market is expected to expand with a single-digit CAGR in between 2022 and 2027 on the basis of revenue generated. It is anticipated that Neo Banking industry will grow owing to factors such as increasing internet penetration and better product offeringsin a competitive landscape in the coming years. India has been culturally conservative towards online banking and it is has always believed in physical contact with the official. But new-age start-ups are very focused on changing this mentality by creating awareness about how Neo Bankings can be used for normal banking activities.

Many new Neo Banks will be entering the Indian Neo Banking space by offering services to individuals and corporates. All Neo banks in this space are trying to attract customers through their digital offerings and will witness significant growth in new customers in the coming years. Banks and Card providers like VISA, Mastecard are also exploring partnerships with Neo Banking players to acquire new customers to their platforms. Traditional players need to take a cue from these players to enhance their offerings in the coming future. Teenagers are the untapped banking customer segment with no major offerings by the traditional players which has been overcome by Neo Banks such as FamPay, Akudo and more

Key Segments Covered in Indian Neo banking Industry

• Indian Neo banking Market

By Type of Accounts

• Saving
• Business

By Region of Operation

• North
• West
• South
• East

By Type of Application

• Personal
• Enterprise
• Other

By Age of Users

• Less than 20
• Between 20-40
• More than 40

Overview of India Neo banking Industry

• Cross Comparison of Indian Neo banking Industry Players
• Value Chain Analysis of Neo Banks
• Investment Analysis in Neo Banking companies
• Neo Banking Industry Analysis

Key Target Audience

• Neo Banking Players
• Credit Based Neo Banks
• Payment Gateway Banks
• Banking Institutions Payment System Operators
• Associated or affiliated Banks with Neo Banks
• Regulatory Bodies for Neo banking Players
• FinTechs
• Various Card holder providers
• New Entrants in Neo banking Space
• Potential Neo banking Users

Time Period Captured in the Report:

• Historical Period: FY’2017-FY’2021
• Forecast Period: FY’2022-FY’2027F
• Indian Neo banking Industry Players/Ecosystem
• Neo Banks
• InstantPay
• NiYO
• Freo
• EscrowPay Neobank
• Open
• Avail Finance
• RazorPayX
• Fi Money
• Jupiter
• FamPay
• Karbon Card
• OneBanc
• FloBiz
• ZikZuk
• Akudo
• Mahila MoneyPayment Gateways
• PayU Money
• CC Avenue
• Paytm
• Paypal
• Instamojo
• EBS
• Cashfree

Key Topics Covered in the Report

• Overview and Genesis of Indian Neo Banking Market
• India Neo Banking Industry Cycle

Overview of Neo Banking Services/ Products

• Consumption Expenditure and Borrowing Trends
• Socio-Demographic Outlook of India
• India Neo Banking Industry Introduction
• Ecosystem of Entities in the Indian Neo Banking Industry
• Value Chain Analysis of Neo Banking
• India Neo Banking Market Sizing on the basis of Revenue and Number of players in the Neo Banking Industry
• India Neo Banking Market Segmentation (By Type of Accounts, By Region of Operation, By Type Application and By Age Group of Users).
• Cross Comparison of Major Players in Neo Banking Industry
• Trends and Developments
• Growth Drivers of the Indian Neo Banking Industry
• Issues and Challenges in the Indian Neo-Banking Industry
• Role of Government and Regulations in the Indian Neo-Banking Industry
• Risk Involved and COVID Impact in Business Operations
• Porter’s five forces Analysis of the Indian Neo-Banking Industry
• SWOT Analysis of the Indian Neo-Banking Industry
• Investment Analysis of the Indian Neo Banking Industry
• Investment Timeline of the Indian Neo Banking Industry
• Investment Segmentation basis of type of Investment, Type of Investor
• Increase in number of Neo Banking start-ups
• Future Outlook and Projection for Market Sizing

Future Outlook and Projection for Market Segmentation

• Computation of Addressable Market
• Growth of Digital Lending
• Industry Speaks
• Research Methodology
• Company profile of major Neo Banks’s players operating in the ecosystem (Company Overview, About the Company, Revenue Model, Funding and Investors, Key Features, Fee Structure, Product Offered, Strengths, Recent Developments, Key Takeaways and Financials)

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• TAM/SAM/SOM Analysis
• Customer Cohort Analysis
• Marketing Initiatives
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• Interactive Data Visualizations
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• 3 Months Post Sales Analyst Support
• Complimentary Update Next Year
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