Cartoon: Model Behaviour
Model Behaviour by Ian Foley
This new cartoon illustrates how neobanks need to evolve their fee-based business models to target service-based revenues.
New digital banks such as Revolut and Dave entered the consumer market offering debit cards and current accounts and then expanded into higher margin exchange fees (cryptocurrency, for example).
While this resulted in fast customer acquisition, a fee-based business model is susceptible to competitive pressure and has low margins.
To address this, neobanks need to move into banking services, which offer a more stable revenue stream and higher corporate valuations. For example, providing subscription-based solutions that offer a bundle of services.
You can find more of Ian’s cartoons here.