SBI YONO leads neobanking club with 54 million monthly active users

Neo banks — purely digital banks with no physical presence — are slowly catching the fancy of Indian consumers.

Some of them are already making waves globally. With 54 million monthly active users (MAUs), SBI YONO has hit the number one slot in the global list of top neo banks across the globe with a growth of over 35 per cent in MAUs in 2021 according to latest data from App Annie. It’s nearest rival Nubank (the largest financial tech company in Latin America which is valued at $41 billion) is in the second spot.  

Unlike SBI which is a traditional bank which now has a digital offering, Nubank does not have any legacy of a bank.  

According to SBI’s assessment, YONO is valued at around $40 billion but analysts say that it would have surpassed or hit $50 billion in 2021.  The state-owned bank is planning to position YONO as a super app for an entire range of financial services.  

The number for YONO is even higher if the lighter version of the app, SBI YONO Lite is also added to its MAU figure. It is fourth in the global pecking order with 18 million MAUs and when this is added to SBI YONO’s 54 million MAUs, the total comes to 73 million. This accounts for over half of the MAUs globally of the top five players in the neo bank space.  

Currently, there is no regulation allowing the setting up of purely digital banks. All that is possible is for traditional banks like SBI and DBS Bank, for instance, to provide a digital offering.

But a whole host of neo banks that have sprung up partner with traditional banks and do sourcing and front end management while the banks handle the back end and the transaction processing. These neo banks offer savings accounts, loans, credit cards, forex cards, and insurance.    

Independent neo banks, however, have a much lower customer base in a market where one player already reigns supreme. For instance, InstantPay, the neo bank which claims it is one of the largest players, has over 10 million MAUs. It has  raised $380 million already but its valuation has not been disclosed.  

According to research by CLSA, eight of the top ten independent neo banks for which data is available have raised over $848 million collectively.  Their combined customer base is less than 30 million (many subscribers will be common across several of them).

The valuation of four of these companies for which data is available — Open, Jupiter, Fi, Niyo — has just gone over $1.1 billion. Half of this valuation comes from Open which is currently valued at $0.5 billion.

Global neo banks are also now coming to tap the Indian market directly or indirectly. 

The UK headquartered digital bank Revolut, valued at $5.5 billion,  is planning to expand here, invest $25 million and launch its app in 2022. It is among the top five neo banks globally in terms of MAUs.

Jupiter has raised financing which has been co-led by Nubank