Neobanks have made strides in capturing market share from traditional banks, particularly taking advantage of the current high-interest rate environment to attract retail savings. According to the latest report from Citi on the Spanish financial sector, these digital entities like Revolut, MyInvestor, and ING account for 5% to 6% of new deposit inflows, which, while notable, is minuscule compared to the overall market where they hold only 0.2% of total assets.

Despite their growth in deposit inflows and users, the report highlights a significant concern regarding the depth of customer relationships with these neobanks. The findings indicate that while more customers are attracted by the convenience and competitive interest rates offered by neobanks, the lack of customer loyalty presents a challenge. This raises critical questions about whether neobanks can maintain their growth and establish a lasting presence in a sector primarily dominated by traditional banking institutions.

As the digital battle for deposits intensifies, traditional banks are now faced with the challenge of adapting to this shift while figuring out how to respond to the growing digital competition. The findings suggest that while neobanks are successful in attracting customers, they must work on enhancing customer engagement and loyalty if they want to increase their market share significantly and survive long-term in the competitive landscape of the financial sector.