The Truth About Digital Banking: The Fragile Ecosystem Behind 1.46 Billion Users

By: Francesco Andreoli, Head of Developer Relations at Consensys

Compiled by: Chopper, Foresight News

Everyone is focused on rounds of funding, yet no one pays attention to the waves of demise. Thus, I recorded both.

Six months ago, I started counting Neobanks. I realized that no one could clarify exactly how many are still operating in the market. Even analysts selling reports for $4,000, VCs funding such projects, or competing founders could not provide an accurate answer.

As of July 2026, there are 368 Neobanks verified and still operating normally. I continuously track every institution based on public data from neobankbeat.

But the number that truly reshaped my understanding of this industry is not 368. It is the names I had to remove during the process of compiling the list.

368 Active Neobanks

Let's start with the undeniable rise of the industry. Aggregating data disclosed by each enterprise in the database, the Neobanks we track serve a combined total of approximately 1.46 billion users. This is not projected data, nor market target deduction, but the actual customer scale reported by each.

The geographical distribution of users will overturn the inherent perceptions of Western fintech media readers: 817 million of these users are located in Asia. WeBank alone serves over 400 million users, higher than the sum of all Neobank users in the United States and Europe. Nubank's customer count is 131 million more than all Neobanks in the United States combined. European benchmark enterprise Revolut has a user scale of over 50 million, which is certainly impressive, but compared to the Asian market, it is just a small fraction.

The focus of industry innovation has also shifted. Among Neobanks established after 2020 and surviving to this day, 30% belong to native Web3 self-custody applications, where the platform does not hold user funds. For similar institutions established in the 2010s, this proportion was only 4%. Regardless of how you view cryptocurrency, builders have made their choice with action.

Therefore, the rise of Neobanks is real. The 368 institutions are divided into three distinct waves of development: 254 traditional challenger banks, 58 fiat and crypto hybrid platforms, and 56 Web3 native platforms; backed by 106 infrastructure service providers and supported by 219 investment institutions. The complete ecosystem context is clearly visible.

Next comes the truth that will not appear in any funding pitch PPT.

Among the 368 institutions, only 127 hold full banking licenses.

Yes, two-thirds of the platforms named "Bank" in app stores do not possess banking qualifications. They rely on partner licensed banks, electronic money licenses, or card issuing institutions rarely heard of by the public to obtain operating permissions. The vast majority of customers cannot distinguish the boundaries at all.

This is absolutely not an insignificant technical detail, but a core structural risk of the entire industry, and has already caused multiple incidents:

• 2018 WaveCrest: Visa terminated cooperation, dozens of crypto card projects shut down overnight;
• 2020 Wirecard: 1.9 billion euro funding gap, causing a large number of European Neobank services built on it to freeze;
• 2024 Synapse: Banking as a Service (BaaS) provider collapsed, ordinary American users realized that the so-called "FDIC protection" was not as imagined, because problems occurred in the underlying system recording fund ownership;
• 2026 Ready: History repeats itself, only the protagonists have changed to a new batch of players.

When a formal bank goes bankrupt, deposit insurance pays out depositor funds. Once the infrastructure relied upon by Neobanks collapses, customers can only queue in the bankruptcy liquidation line.

The demise of this industry is always silent, which is exactly what is most worthy of vigilance.

At the beginning of compiling this database, I did not expect: the removal operations on the list never stopped.

This month alone, five institutions were removed from the list: liquidation and bankruptcy, acquired and merged, or quietly transformed. No press releases, no post-mortem summaries. Neobanks do not collapse spectacularly like FTX. It's just that the App stops updating, customer service no longer replies; one day, the official website domain redirects to a partner's webpage, and hundreds of thousands of customers either migrate funds or lose them just like that.

No media writes obituaries for defunct Neobanks. Fintech media is keen on reporting new project launches and funding good news, with advertising revenue and industry resources concentrated there. Bankrupt enterprises are forever hidden from view. Thus, a new generation of founders constantly step into the same traps, still thinking they are the first to discover the problem.

This is exactly why we value the birth of new institutions and the exit of institutions equally. Data on failure cases is far more valuable than funding news. Press releases cannot teach people lessons.

"Can Artificial Intelligence Improve Profitability Problems"? Is That Really So?

Nowadays, almost all Neobank funding PPTs mention Artificial Intelligence. We verified 368 platforms one by one, comparing regulatory announcements, filing documents, and actual landed products, rather than simply referring to marketing copy.

Only 67 platforms completed scaled implementation, accounting for 18%. The remaining 300+ are either still in the pilot stage, or merely in "exploration and development", or directly borrow partner models to claim proprietary technology.

Who are the players truly implementing AI Neobanks? The answer is surprising. Most pioneers of AI applications in the industry are not well-known large factories, but credit institutions in emerging markets such as Nigeria, Philippines, Mexico, and Bangladesh. In these regions, the credit reporting system is imperfect; relying on models to grant credit to people lacking credit records is not just a product highlight, but the foundation of corporate survival. While Western markets talk about AI banks, Global South markets have already achieved scaled implementation, with survival needs forcing innovation.

The Truth Revealed by the Ecosystem Landscape

Looking across the ecosystem infrastructure, 106 service providers support 368 consumer-facing brands. In this layer of the system, a few partner banks, BaaS platforms, and card processing service providers simultaneously carry dozens of upper-layer brands. The high concentration difficult for consumers to perceive is exactly the source of hidden dangers for the next Synapse-style crisis.

Above is the true appearance of the industry in 2026. The industry has welcomed extremely transformative growth, with 1.5 billion people using banking services via mobile phones, among whom a large number obtained financial services for the first time; but the entire system is built on underlying service providers that the public knows almost nothing about. Two-thirds of the platforms, once upstream partners encounter a crisis, will find it difficult to survive.

Finally, I give three predictions, while accepting that they may be falsified:

• The license gap will close from both ends. Powerful unlicensed platforms will acquire or apply for banking licenses; weak platforms will exit the market one after another in 2027, and players in the middle ground will disappear.
• The first AI credit model explosion will occur within the next credit cycle. Of the 67 scaled implementation models, the vast majority have not yet experienced complete economic downward pressure. Some teams are about to witness risk scenarios not covered in AI training data.
• The next generation of financial service customers will no longer be natural persons. Financial underlying channels for AI intelligent agents, intelligent agents autonomously managing wallets, autonomously issuing cards, machine-to-machine payments, currently only 7 enterprises are laying out. The current landscape resembles the Web3 track in 2021: not many participants, niche models, but possessing long-term structural opportunities.