The Early Days of Neobanks in Europe: Identification, Performance, and Riskiness

• Type: Article in International Scientific Journal
• Date: 2024

Authors

Citterio, A (Author) Other; Marques, Bernardo P. (Author) FEP; Tanda, A (Author) Other

Journal

Title: JOURNAL OF FINANCIAL SERVICES RESEARCH

ISSN: 0920-8550

Indexing

ISI Web of Knowledge - 2 Citations

Scopus - 2 Citations

Other information

Authenticus ID: P-010-ZS6

DOI: 10.1007/s10693-024-00433-x

Abstract (EN): This paper identifies banks born with a digital business model ('neobanks') and examines their performance and riskiness vis-& agrave;-vis traditional peers. We propose a novel approach to identify neobanks, based on non-financial hand-collected data, and identify 65 neobanks operating in Europe. We show that neobanks perform worse than their traditional peers, while recording a similar level of risk. Namely, neobanks charge higher interest income, record higher impairment charges, and face higher non-staff expenses. Further analysis suggests the presence of economies of scale and scope in digital banking. Our findings are robust to endogeneity concerns and changes to our baseline specification.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 47