29th of May 2025 – Both business models pursued the same approach: making wealth management accessible to the masses – anytime, anywhere. But neobanks have created a new recipe from the same ingredients: They no longer rely on marble halls to build trust, but rather on transparent offerings, view compliance as a competitive advantage, and test new concepts directly with their target groups.
Today's neobanks and neobrokers have achieved something in just a few years where many online banks of the 1990s failed: They scale faster, reach investors worldwide, and gain the trust of new target groups who would never have previously engaged with financial matters. The basic idea behind both generations of financial service providers is quite similar. Both the digital banking pioneers of the 1990s and today's disruptors wanted to democratise financial services—making them more accessible, affordable, and convenient. However, their success rates varied greatly. The starting point for the first online banks was promising: They had the trust of broad customer bases, established brands, and often impressive premises on their side. But only a few succeeded in converting these advantages into long-term growth.
In contrast, today's neobanks are building customer networks of millions in record time. This discrepancy can be traced back to four key pillars: Today's players have succeeded in making technology accessible to a broad audience while still personalising it – far beyond a simple app. They do not see compliance as a hurdle, but actively embrace it. Furthermore, they have not only prepared their servers for growth – everything from onboarding to customer support to fraud detection is scalable. And they have built trust without imposing marble halls or big brand names: through transparent, understandable products and services that they have gradually expanded.
Broad customer base – advantage or obstacle to growth?
Many banks that ventured into digital services in the 1990s had one thing in common: a broad existing customer base. Initially, this seemed like a strategic advantage – but for many, it turned out to be a brake on innovation. Established banks had to carefully consider every step: Will this cannibalise our traditional business? How would our existing customers react? Does this fit with our brand? This caution often led to bold, disruptive steps being slowed down or even blocked altogether. Neobanks, on the other hand, started from scratch. They organised themselves around the customer journey and desired outcomes. Their approach focuses not on products but on meeting their customers' needs – such as building wealth, acquiring real estate, or planning for retirement. A neobroker's first thousand customers were pure gain. They could experiment, fail, and improve – without risking their reputation with a conservative customer base. This led to a completely different culture of innovation. Many of the decisions made also helped reduce costs and increase accessibility: eliminating branch networks, automating processes, and introducing freemium models with premium features—from ETF investments to crypto options.
Rethinking instead of improving: why disruption is a question of mentality
When comparing traditional online banks with disruptors, the difference in mindset is striking. Established players often follow a 'protect and expand' mentality – focused on defending profit margins, legacy models, and market territories. Innovation tends to be introduced incrementally: How can we improve what we already do? Neobanks and neobrokers, on the other hand, operate according to the principle of 'change and evolve'. They question the fundamentals: Do we even need human advisers for asset allocation? Why do the minimum investments have to be so high? Why can not financial planning be as intuitive and stimulating as Spotify or Instagram? They have also redefined another core principle of the industry: traditional wealth management was based on the premise of exclusivity. Personal, tailored service was part of the value proposition. The real challenge in democratising wealth management now is to offer the same level of personalisation at scale. The platforms that are ahead in this race are not only mobile-first, but also data- and API-driven, and seamlessly integrated into the broader financial ecosystem. They adapt quickly to evolving user needs and leverage behavioral insights to guide customers through complex decisions—clearly, simply, and without overwhelming them.
Do traditional banks have a "no department?" Compliance as a growth driver
Many new banks are leveraging this challenger mentality to strategically leverage regulatory requirements to their advantage. While traditional institutions often treat compliance with caution or even reluctance, fintechs see it as an opportunity. This caution does not stem from disregard; quite the opposite: traditional banks take compliance very seriously and are often leaders in adhering to strict regulations. But their approach tends to be defensive and risk-averse. Neobanks and neobrokers go beyond mere compliance—they embed it into their value proposition. In large banks, compliance departments often act as gatekeepers, whose default answer is once again 'no' to avoid risk. Things are different for neobanks. For them, compliance is often a question of design: How can we meet regulatory requirements while providing a seamless customer experience? These companies seamlessly integrate processes like Know Your Customer and Anti-Money Laundering into modern user interfaces and leverage tools like real-time alerts to actively strengthen the relationship of trust. The new generation of financial service providers understands that trust is not built through tradition, but through transparent, understandable safeguards.
The trust factor – how neobrokers use a disadvantage to their own advantage
Trust is the most important currency in banking – especially when billions of customer funds and sensitive personal data are at stake. On paper, the banks of the 1990s were well positioned for this: with tradition, a respectable reputation, and extensive branch networks. But these very strengths became a challenge in the transition to mobile banking models. The transition from marble halls to apps was difficult – many customers were skeptical and strongly tied to the analog world. Neobanks, on the other hand, have learned to build trust digitally – from using simple language to being completely transparent about how they make money. They rely on intuitive, educational user experiences, replacing the old reliance on paperwork and prestige. Today's neo-players start with low-risk, easy-to-understand products and build credibility gradually. Education also plays a central role: Their platforms do not just execute – they explain and guide, which deepens investor understanding and loyalty.
This does not mean that the early online banks are doomed or will disappear altogether. But they have been struggling for some time, and they're beginning to see the added value of a bolder approach to digitalisation—something their competitors are already implementing. In fact, many traditional banks are now actively collaborating with fintechs to develop modern financial solutions that integrate with their existing offerings. It's a win-win-win situation—not only for both types of financial service providers, but also for their customers.
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