Neobanks Peaked. Infrastructure Is What’s Scaling Now
By Arthur Azizov, Founder and Investor at B2 Ventures
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Executive Summary
- Neobanks have proven the fintech thesis with explosive growth and billion-dollar profits, but their once-disruptive UX playbook is now a commodity, leaving them struggling to differentiate beyond branding.
- The real battleground has shifted to infrastructure — compliance, ledgering, and risk engines — where plug-and-play models are showing cracks and control of the stack is becoming the new definition of strength.
- The future belongs to invisible finance: modular platforms powering ecosystems and verticals behind the scenes, where strategic ownership of rails and regulatory depth will decide who wins the next decade.
For the better part of the decade, neobanks were seen as the next frontier for financial services. With sleek apps, fast onboarding and big ambitions, they were challenging traditional banks and giving them a reason to move faster. These aren’t just words: Revolut reported $1 billion net profit in 2024, while Nubank’s net income surpassed $2 billion. The vision worked.
But in 2025, it’s clear that sleek apps and smart UX are no longer the differentiator they once were. The playbook is now predictable and the products increasingly interchangeable. Most neobanks risk to run on similar infrastructure, offer the same features, and face identical regulatory issues. So, growth isn’t the issue — strategic depth is.
And as the front end has done its job, the real edge now sits in what’s underneath: platforms, rails, and regulatory engines that actually make financial products work at scale.
Neobanks Aren’t Failing — They’ve Just Peaked
Neobanks did exactly what fintech was supposed to do — made finance faster, simpler and genuinely more user-friendly. Traditional banks didn’t see them coming and by the time they did, millions of customers had already moved their deposits, their daily payments and their loyalty.
Surely, some digital-first banks have grown into real contenders in global finance. As earlier mentioned, Revolut and Nubank are prime examples both combining consistent growth with solid financials. And it’s clear that they have already outgrown their “app” phase and now operate as full-scale financial institutions.
But 2025 feels different. Not because neobanks are collapsing, they’re not, but because the model that fueled their rise is starting to show its limits. What was once novel has become normal. Zero-fee accounts, early payday, clean UI, push notifications — they’re everywhere. Most neobanks now offer the same feature bundle, running on similar sponsor bank arrangements and telling more or less the same story. As a result, differentiation, which once came from vision and velocity, now comes down to brand tone and card color.
If it’s on the surface, what’s beneath it? There is an architecture that is more uniform and problematic. Many neobanks still rely on BaaS providers to handle ledgering, compliance, payments, and customer funds. Yes, that setup enabled fast time-to-market in the early days, but it came at a cost: limited control, margin pressure and vulnerability.
Crucially, most neobanks don’t own the risk infrastructure themselves — they depend on third parties for reconciliation, fraud detection, and transaction monitoring, leaving them structurally exposed when partners falter or fall short.
The Synapse collapse in 2024 clearly shows it. The fall revealed an $85 million gap between what users were owed and what partner banks actually held. Thousands of users lost access to their funds. So, it exposed how brittle the “plug-and-play” stack can be when things go wrong. And yet, many platforms still lack end-to-end visibility across partner integrations. The result is a fragmented compliance chain — where gaps in oversight aren’t always visible until something breaks, sometimes irreversibly.
Dig deeper:
- Why 74% of Banking Customers Are Ready to Leave
- Schwab Is Now No.1 in Both Checking and Savings Satisfaction. Here’s How They Did It
- They Said It Couldn’t Be Done: Fintechs Gaining in the Race for Primacy
Amidst such cases, regulators are also becoming less forgivable than it was five years ago. In the U.S., the OCC and CFPB are tightening oversight of third-party risk. In the UK, Revolut’s long-delayed banking license — eventually granted in mid-2024 — is a reminder that you can’t scale governance as an afterthought.
And pressure is also reputational. In the wake of high-profile outages and compliance failures, neobanks are under increased scrutiny from institutional partners. Payment networks and embedded finance integrators are now asking tougher questions about settlement risk, onboarding practices and even ESG alignment. In short, the burden of trust is growing — and being “tech-first” is no longer a sufficient answer.
The result is a sector that looks bigger than ever but is moving slower, playing safer and running out of places to hide. Is this the beginning of the end for neobanks? Hardly.
You Don’t Need to Build a Bank to Power One
If the last decade in fintech was about reimagining the front end of banking, the next one will be about building the core layer. And the changes are already underway.
As neobanks hit the ceiling of differentiation, they have to move to infrastructure players: platforms that provide compliance, ledgering, KYC, payments and modular financial components out of the box. For instance, companies like Unit, Synctera and Treasury Prime don’t just offer a “shiny” debit card. These days, they make it possible to launch a regulated financial product in weeks without involving a dozen vendors.
But that early speed came with a price. Plug-and-play architecture often introduced technical and regulatory debt — friction that now needs to be resolved before these players can scale further.
No, it doesn’t mean that only early-stage startups are key drivers. Stripe Treasury, for example, has quietly redefined what embedded finance looks like at scale. Adyen, long seen as a payments processor, now offers a full-stack financial platform, including issuing, acquiring and embedded business banking, directly to merchants. They may not be banks, yet they’re doing what many banks can’t: making financial services composable.
In fact, this modularity changes the rules of the game. Forget the next Revolut. Build for vertical SaaS, creator tools and marketplaces — where finance runs in the background, silently. Look: Shopify embeds financial tools directly into the merchant dashboard. Uber built a wallet into the driver experience. Klarna evolved from a standalone BNPL app into an invisible checkout layer.
In healthcare, some players are doing something similar — embedding financing, payments and risk management tools directly into provider platforms. It’s fintech without the fintech branding, which makes it all the more scalable.
So, infrastructure is turning into a multiplier. Even without consumer-facing brands, the most powerful fintech companies of the next decade will be those quietly owning the rails behind high-volume, cross-vertical financial flows.
Where the Smart Money Is Headed
Major neobanks are already acquiring smaller players to control infrastructure end to end — positioning themselves not just as banks, but as super apps spanning crypto, margin trading, insurance and more. For founders and investors, the message is clear: long-term leverage comes from owning the stack early, even if it means trading off short-term speed.
Smart money of the future will be backing the building blocks: unified compliance, simplified payments, modular credit and ledgers that scale. Importantly, this infrastructure is already becoming basic across SaaS, marketplaces and industries well beyond financial services.
At this stage, strategic control matters much more than speed. The winners will be the ones who build beyond transactions, as they will power entire ecosystems. Think operating systems for finance, abstracted from banks themselves, embedded wherever economic value moves. That’s the next competitive edge: infrastructure that disappears into everything.
