Neobanks Chase a Bigger Prize Than App Engagement

Neobanks have spent years proving they could attract users. And now, there are indications that scale is translating into durable banking economics.

Revolut’s latest results underscore that transition. As PYMNTS reported recently, the company reported roughly $2.3 billion in profit on $6 billion in revenue, with growth tied to subscriptions and payments activity.

The numbers illuminate a model that is based on a mix of fees, interchange and other services.

From User Growth to Balance Sheet Activity

The company’s latest annual report indicates that Revolut’s scale is not confined to account signups. The company ended 2025 with more than 68 million retail customers and 50.2 billion pounds ($67.5 billion) in customer balances, up 66% year over year. That increase in balances suggests that users are placing more funds on the platform.

Lending is also expanding. The loan portfolio reached 2.2 billion pound ($2.9 billion), more than doubling from the prior year. We note that payments can drive engagement, but lending and deposits determine whether a firm operates as a bank in economic terms. The same report noted a 45% increase in customers using Revolut as their primary bank.

Charter Filing Signals a Change in Model

Revolut has also filed for a U.S. banking charter, which would allow it to operate under a single regulator, access core payment rails and offer loans and credit products directly.

PYMNTS reporting from earlier this month noted that the move would allow the company to stop relying on partner banks and instead control its own infrastructure. Operating through partners limits margins and product scope. A charter shifts both. It can be argued that profitability and scale tend to precede regulatory expansion because they provide the capital base and operating record that regulators expect.

Younger Consumers Are Driving Adoption

Demand for digital banking platforms continues to be shaped by younger users. PYMNTS Intelligence data shows that 13.8% of consumers now use a digital bank as their primary financial institution.

The generational split is more pronounced. The Gen Z Decoder Ring report from PYMNTS Intelligence notes that this cohort averages 425 digital activity days per month and manages financial tasks within the same apps used for shopping, communication and entertainment.

That pattern does not reflect a preference for banks in the traditional sense. It reflects a preference for integrated digital environments where payments, savings and spending sit within the same interface.

For providers, the read-across is that the firm that captures daily engagement is more likely to become the primary account.

For banks eyeing competition from the neobanks, some of latter are beginning to operate with the same economic levers.

Deposits are moving onto digital platforms that combine payments, savings and spending tools. Lending is being introduced within those same environments. As those capabilities expand, competition shifts from individual products to the full relationship.

That creates pressure in three areas. Deposit retention becomes more difficult when customers can move funds easily between platforms. Lending faces new entrants that can use transaction data to inform underwriting. The primary account relationship becomes less stable when daily activity occurs outside the bank’s ecosystem. But banks retain advantages in funding, regulation and scale.

Read Across for FinTechs

For FinTechs, the path is narrower. A charter can expand margins and product scope, but it also introduces regulatory cost and operational complexity.

Revolut’s results suggest that diversification and profitability are critical. The company’s revenue mix includes subscriptions, payments, wealth and interest income, which reduces reliance on any single line. That structure supports the move toward regulated banking.

Firms that lack that breadth may find that a charter adds cost without delivering sufficient returns.  For banks and FinTechs, the competitive lines are becoming more clearly drawn, and are no longer between incumbents and apps.  The jousting is between institutions that control the balance sheet and those that do not.