Coronavirus causes pause in neobank profile growth
Coronavirus has caused a drop in exposure for the nation’s digital banking upstarts, interrupting what had been a prolonged period of profile growth.
Analysis by Streem shows stories in the nation’s leading newspapers and news websites mentioning the term neobank have fallen 74% from their peak earlier this year, while coverage of digital or direct banking in general has dropped 66%.
Several leading brands have seen significant cuts to their profile since the COVID-19 lockdown began in March.
The new players had been locked in a fierce competition to build profile over the past 12 months.
Analysis on a specific list of major metro publications showed Xinja had the largest profile of neobanks over the past 12 months (444).
To put that in context, ING had 2507 media items, ME Bank 657 and UBank 392, while the big four all had between 15,000 and 19,000.
The buy-now-pay-later sector has also suffered a drop in profile, although market leader Afterpay continues to dominate with 3.5 times the profile of nearest rival Zip, followed by Klarna. Both Afterpay and Zip received more media attention over the past 12 months than Visa or Mastercard.
Athena (296) had the leading profile of the new breed of digital home lenders, which compared to 409 media items for established brand Aussie Home Loans and 177 for Rams.
Business non-bank lender Prospa attracted 495 mentions throughout the year, including a spike in April when it was granted access to the Federal Government’s Coronavirus SME Guarantee Scheme, but also had to correct an ASX statement over third-party funding.
The study looked at media items in 22 major Australian newspapers and news websites from June 2019-May 2020. Sentiment was not measured. ‘Up’ bank had to be removed for technical reasons.
Note: an earlier version of this story described Prospa as a neobank. It does not have a banking licence.