Natalie Monko Lead Project Manager

    Neobank Growth: How to Scale a Fintech Startup

    What is a neobank? In a nutshell, it’s a bank that doesn’t have physical branches and operates exclusively online. The shift from brick-and-mortar offices to online increased the popularity of such digital banks across the globe, while the COVID-19 pandemic strengthened the position of businesses that provide their services remotely.

    An answer to the question “How to start a neobank?” might be a complex one, but scaling and leading it to sustainable growth is an entirely different (and complex) matter. The vast resources available to big established banks are usually out of reach for fintech startups, and many people are still hesitant about opening another bank account, preferring to stay with an old trusted financial provider. Successful expansion depends mainly on how well four main aspects of business are performed: customer acquisition, operational execution, people and financial management.

    Surf has extensive experience working with fintech companies; among our projects, we’ve built apps for banks and trading platforms and helped our clients scale their business. Read on to learn about the examples of neobanks, the main stages of neobank’s evolution and what are key areas of focus for effective fintech startup scaling.

    Popular neobanks

    Today, the neobanks’ market share exceeds 20% and is forecasted to almost double its size by 2028. Let’s take a closer look at some of the most popular digital banks.


    Revolut, a British fintech startup, was created by Russian and Ukrainian entrepreneurs. The company prides itself as “the UK’s fastest growing financial super app” and has acquired over 14.5 million customers. The company offers banking services, as well as stock trading and crypto exchanges for individuals, and also works as a business neobank for corporate entities. One of the hottest features of Revolut are multi-currency cards that cut down usually high fees when paying abroad.

    Revolut app and card


    Another UK-based neobank, Monzo, has over 5 million customers and provides banking services, such as opening an account, issuing a card, money transfers, and ATM withdrawal completely commision-free. The neobank’s customers can earn up to 0.70% interest on their savings and pay direct debit for utilities and other services. Monzo mobile app is known for its modern UI, has real-time transaction notifications and includes personal budgeting features: customers can set up personalized ‘Pots’ to save money for various goals and invest spare change from rounded-up payments.


    With over 12 million users, Chime holds a place among top neobanks. The American company provides financial services without monthly or transactional fees. The neobank’s business model is based on earning from interchange fees paid by merchants, with whom Chime customers make purchases. Chime clients can overdraft up to $200 on debit cards, receive salary up to 2 days in advance and withdraw cash from over 60,000 partner ATMs without additional commissions. Monzo mobile app supports instant money transfers and allows users to block certain types of transactions for safety reasons.

    Chime app and card


    Currently, Nubank is one of the biggest neobanks in the world and has over 40 million customers. The Brazilian neobank focuses on the underserviced and unbanked population and provides two types of accounts: NuConta for personal clients and Conta PJ for corporate clients. Clients are not charged anything to open both types of accounts, and Nubank offers low rates on transactions and withdrawals. The company’s app was developed with Flutter cross-platform framework and has all functions necessary for daily finance management.

    Nubank app

    Neobank’s main stages of development

    Generally, there are three main stages every neobank goes through. Let’s see what defines each of them.

    Startup stage. Just as any other tech startup, neobank begins from a core team getting together, which usually includes CEO, COO and CTO, and developing a general vision for the future company: what is its unique offer and who are the target audience. This is followed by building a minimum viable product  (MVP) — a product’s prototype that includes key functions. During this stage, the CEO (as well as other team members) plays the role of ‘jack of all trades’, filling other positions and doing emergency tasks when necessary.

    Growth stage. When the neobank’s revenue exceeds $1M, the business enters the phase of growth. During this phase, the significantly larger team develops and improves the product, so it can reach market fit. This phase is also characterized by a better understanding of who the company’s ideal customers are. During the growth stage, C-level executives focus more on team management and establish unified development standards and working culture. 

    Scale stage. When the revenue hits the $10M threshold, the neobank becomes an important player on the market. It is time to scale the company by finding new market niches and new customers. The main focus of this stage is to make investments bring predictable returns in the business’s main area and start entering adjacent markets. During this stage, the upper echelon of the management pays more attention to building a long-term strategy and the company’s  vision. 

    How to scale neobank

    The stable and long-term growth of a digital banking startup is a difficult task that requires its team to use the latest and most effective technologies to surpass competitors and offer the best services to customers.

    Customer experience is a top priority

    Why would a person choose to open a bank account in an emerging bank instead of a corporation that has been around for decades or even centuries? The major reason is that neobanks do things faster and in a more convenient way than traditional banks. To make your neobank stand out against competitors, focus on improving the customer journey.

    For example, when Surf developed Zenit Banking App, our team thoroughly analyzed the process of a loan application. Then we adapted and shortened application forms, while designers arranged the firm’s UI elements in a user-friendly way. As a result, Zenit clients are now able to quickly apply for a loan online in a matter of minutes, without visiting a physical office and having to deal with multiple paper documents.

    loan application screens

    Adding popular features is another aspect that helps attract and retain customers. Many of us have habits of how we pay and manage our finances, and a neobank app should be able to provide usage patterns that are comfortable to customers. For example, contactless payments, especially QR payments, is one of the emerging fintech trends. A code scanned by a phone’s camera gives access to a website or payment details. QR-codes are more secure than other payment options, they can store a large amount of data, be static or dynamic (useful for one-time payments), and get scanned even when partly damaged. Integration with a phone’s camera and QR-code reader is a must-have feature for a neobank app — this will allow users to pay their bills and buy items in physical stores seamlessly within the app.

    Service culture and personalization are also desirable traits of any modern bank. According to researchers, 86% of customers are willing to pay more for great customer service. Personalized offers, post-transaction support and rewards for long-time customers, all of these can improve customer acquisition and retention rates.

    Analyzing performance is crucial for the successful neobank scalingl. Establish regular measurements of how people use the company’s products and collect feedback on how simple and convenient your solution is. Only comprehensive analysis can provide a deep understanding of customers’ expectations that can help in delivering a truly great experience to your clients.

    Use top technology and don’t reinvent the wheel

    By implementing cutting-edge technologies such as augmented reality (AR), blockchain, artificial intelligence (AI) and machine learning (ML) a neobank can further personalize its services, reinforce security and stay on top of its game. The important thing is to integrate ready-made solutions and avoid unnecessary expenses of developing them from ground zero. For example, APIs (application programming interfaces) provided by Plaid and CreditKudos conduct customer identity checks and help establish their credit score faster and more accurately. Other mobile banking trends, such as biometric identification and AI-powered chatbots, can also be successfully integrated using third-party solutions.

    Today mobile banking apps are the major tool for people to manage their financial matters, and a neobank wouldn’t want to save resources and deliver a subpar mobile experience to its customers. However, there are still ways to cut down costs without sacrificing quality. Building apps with cross-platform frameworks such as Flutter can save a lot of time and money — the most important resources for any startup. While native apps for iOS and Android require two separate teams of developers creating two apps with different programming languages, a cross-platform app uses a single code base for both iOS and Android apps and requires only one development team. From Surf experience, cross-platform development has the potential of saving about 30% of the money and 40% of the time compared to native development.

    Because fintech becomes an increasingly regulated sphere, it pays off to seek out partnerships with established financial companies in the beginning. Many digital banks that haven’t acquired a banking license yet operate in partnerships with traditional banks: while a neobank provides technology solutions, a customer’s money is essentially handled by a licensed bank. Such collaborations may help a neobank during the growth stage by decreasing the amount of necessary licensing and compliance; however, it is important to carefully consider the terms of a partnership to avoid possible conflicts and misunderstandings later on.

    Be fast and agile

    One of the key strengths of neobanks compared to traditional financial institutions  is how flexible they can be. Absence of unnecessary bureaucracy, an agile state of mind and willingness to think differently nurture innovative ideas and solutions (even if some of them might fail after all). When scaling neobank,  it is important to focus on momentum and not lose speed even if something doesn’t go according to plan — a startup usually doesn’t have that much cash to burn, and prolonged hold-ups put the entire business at risk.

    For example, when Surf was hired to build apps for PSB bank, one for corporate VIP clients and the other for small and medium-sized businesses, we developed the first version for VIP clients in just 3 months using native iOS and Android frameworks. Of course, such fast progress was possible because the Surf team was pretty much on the same page with the PSB team in terms of the apps’ vision. But another key factor – ability to stay agile – is a part of the company’s internal culture that fosters the spirit of innovation, lets every employee suggest improvements on regular meet-ups and promotes openness in all aspects of work.

    banking app screens

    Community & transparency

    Openness and active communication with customers are things that set neobanks apart from their traditional counterparts. For example, Revolut organized a series of community events called RevRallies across the globe, where customers were able to meet the team behind the product, learn about upcoming updates and, of course, have some cold drinks and hot snacks. The events were live-streamed on YouTube and other platforms.

    Being transparent with your users and offering them a chance to participate in some aspects of the business is another way to popularize a startup and its services. Monzo serves as a great example here: the UK-based digital bank shared a roadmap with details and release dates of upcoming features. Also, in 2017, the company explained to users the incurring costs that build up ATM fees abroad  and presented three models of fees for public voting. After receiving more than 6,000 votes, Monzo implemented the most popular option.

    Hire global talent

    Building a fintech startup with HQ in California, for example, doesn’t mean you’ll have to limit yourself with only local talent. Distributed working model, when team members work from different physical locations, gives access to the best specialists from all over the world and makes hiring process cheaper and more effective. For example, hourly rates of mobile app developers in the US and Canada are $100 and higher, while developers in Western European countries, such as Ukraine and Russia, write code of the same quality for $40-45. Learn more about global talent acquisition in our article on where to hire developers.

    mobile app developers rates

    Also, distributed working eliminates the necessity to have a complete local team in every country a neobank expands to, which helps to scale business at a faster pace. During the pandemic, many employees have found working from home to be beneficial for their productivity and work-life balance, so positions that allow remote working have higher chances to get filled with suitable candidates these days.

    To sum things up

    The COVID-19 pandemic has shown that the shift to digital banking from brick-and-mortar visits to bank branches is here to stay, while large parts of the population in developing countries remain underbanked. This means that neobanks’ market size would grow globally and emerging digital banks have all the chances to find their target audience and become successful. However, scaling and long-term growth of a neobank remains a complex task to focus on, which entails additional objectives, such as: acquiring long-term customers and gaining their trust; using top technology; maintaining agile corporate culture and hiring top tech talent from all over the world.
    For neobank, its mobile app is the main point of interaction with customers, so delivering a great user experience is a key ingredient to successful customer acquisition. Surf has over a decade of experience building mobile apps, using both native and cross-platform technologies. We’ve worked on many fintech projects and built apps for individual and corporate clients of banks and a trading platform. If you are just planning to build an app for a neobank or want to improve the existing solution, fill in the form and we’ll contact you shortly to discuss the details and estimate your project.