Why incumbents keep building neobanks
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Why incumbents keep building neobanks

Carlo Messina, CEO of Intesa Sanpaolo | Photo: Getty

Intesa Sanpaolo’s Isybank is the latest in-house neobank to run into trouble. But the desire to migrate core-banking systems onto the cloud is still encouraging other banks to follow this strategy.

It is notoriously difficult for legacy banks to build new digital-only brands capable of facing down the threat from independent neobanks such as Revolut or Nubank. NatWest’s Bo and JPMorgan Chase’s Finn are among the best-known flops, both closing shortly after launch in the late 2010s.

Nevertheless, banks keep on trying.

The latest to run into difficulty has been Isybank, launched last year by Italy’s biggest bank, Intesa Sanpaolo. This was not due to a technological or branding failure. Instead, in November, the Italian competition authority ordered Intesa to halt a planned transfer of millions of customers onto the app-only service before 2025 out of concern that the account holders had insufficient choice in the matter.

“Our expectation is to continue to have a significant number of clients in Isybank,” Intesa chief executive Carlo Messina insisted on the firm’s February results call, although he acknowledged Intesa would now need to have customers' explicit buy-in before migrating them over to Isybank.

A slower migration seems inevitable.

Arguments for the new

That building a new brand like Isybank could be more appealing to younger generations is a common argument for building in-house neobanks.

Incumbent banks’ reputations have suffered over the past two decades due to financial crises and conduct issues.


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EMEA editor
Dominic O’Neill is EMEA editor. He joined Euromoney in 2007 to cover emerging markets, focusing on central and eastern Europe, Middle East and Africa, and later on Latin America. Based in London, he has covered developed market banking since 2015.
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