Digital Bank Trends

The first widely accepted digital bank was probably PayPal though it never marketed itself as such. It was 'a bank without the oversight that comes with a banking license'. Accounts could be used to send, receive and store money.

Digital bank Starling's revenue rose by 600% in 2021, in part due to being a channel for UK's pandemic recovery loans. Starling offers a rich set of account types: personal, sole trader, business, kids, joint accounts and multi-currency. Plus debit cards and post office cash deposits. (With digital banks not having branches, the post office may make a comeback as the human UI and as an alternative or supplement to high-tech banking).

Square launched its small business digital bank last week. Being a point-of-sale (PoS) supplier, it must have figured rather than bank in proceeds, why not deposit them with Square itself. But it's not just another small business bank, it offers features such as:
  • Automatic repayment of loans by deducting a percentage of sales
  • Repayments linked to sales: sell more, pay more; sell less, pay less
  • If locked down, repay only the minimal amount every 60 days
  • Automatic saving of a percentage of sales for capex, taxes etc

  • C6 - JP Morgan Chase buys 40% stake in Brazilian digital bank
  • HMBradley - Bank that laser focuses on savings, not spending
  • Juni - Bank that speaks ecommerce: ad spend, card reject etc
  • Nomo - First Islamic international digital bank
  • Fair - First halal-certified neobank in the US
  • Zopa - P2P lender turned digital bank
  • Kroo - Social bank with a transparent roadmap