Bryan Cave attorneys authored an article April 28 in EUBankers regarding the growing trend of neobanks and challenger banks. Neobanks are “near-banks” that do not actually hold a banking license, or small institutions that often restrict their services to mobile or online only. “Overall it appears that the development of Neobanks and Challenger banks may be a benefit to consumers with low-value accounts who need less expensive but readily accessible payment means,” they wrote. “Whether these institutions can really replace mainstream banks for large lending, accounting and investment matters is doubtful. Competition is fierce, and many Neobanks complain about the difficulties in obtaining bank accounts or access to banking systems. On the other hand many mainstream banks complain that the regulatory landscape in the UK and Europe which often favours smaller start-ups and “fintechs,” creates an uneven playing field making it harder for highly regulated large banks to compete for consumer accounts – especially among millennials.”

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