Neobanks Move into Full-Service Digital Banking — Beyond Debit Cards and Fees

The rise of neobanks has disrupted the traditional banking sector, bringing innovation to the forefront with their digital-only models and simple financial services. However, the landscape of digital banking has evolved, and neobanks have had to adapt to the realities of customer acquisition costs, compliance demands, and sustainable growth. Initially built on the strength of card-driven spending experiences and fee-free accounts, neobanks are now diversifying their offerings beyond interchange revenue to build full-service platforms that offer deposits, lending, premium subscriptions, and even global retail payment networks.

This transition reflects the growing pressure on neobanks to find more sustainable and profitable business models. By expanding their product portfolios and incorporating banking services, neobanks are setting themselves up for long-term success.

What Neobanks Are Today: Moving Beyond Debit Cards and Spending Apps

At their core, neobanks are digital-only financial institutions that provide banking services without physical branches. They typically partner with insured banks to offer regulated deposit services. In their early stages, neobanks like Monzo and Revolut were built around simple, intuitive apps that offered free debit cards, easy payments, and instant spending alerts. This model helped them grow rapidly, attracting customers who valued user-friendly experiences and lower fees compared to traditional banks.

However, as these platforms matured, interchange fees (the fees paid by merchants to banks for processing card transactions) alone were no longer sufficient to sustain the cost of customer acquisition, regulatory compliance, and continuous product development. As a result, neobanks have expanded their offerings to include a wider array of services that can generate more diversified revenue streams.

Overview Table: Neobanks’ Evolving Revenue Models and Services

Neobank	Original Focus	New Service Offerings	Revenue Streams
Monzo	Debit cards and fee-free accounts	Overdrafts, savings accounts, premium subscriptions (Monzo Plus)	Subscription fees, overdraft interest, savings accounts
Revolut	Instant spending alerts	Foreign exchange, wealth management, business banking, subscription tiers	Subscriptions (Premium & Metal), foreign exchange, wealth management, business services
Klarna	Buy Now, Pay Later (BNPL)	Merchant fees, fair financing, card economics, price comparison	Merchant fees, interest income from financing, card transactions, value-added services
SoFi	Digital banking, checking accounts	Lending, investments, mortgages, credit cards	Lending margin, investment income, net interest from deposits
LendingClub	Peer-to-peer lending	Acquired Radius Bank, allowing deposits and loans to be held in-house	Marketplace revenue, balance sheet interest income, deposit-based products

The Shift Toward Full-Service Platforms

As neobanks grow, their ability to offer a wide range of services beyond basic accounts becomes increasingly important for building a sustainable business model. Key players in the market, including Monzo, Revolut, Klarna, and SoFi, have shown that the future of neobanks is rooted in offering diversified products that cater to both individual and business customers.

• Monzo and Revolut pioneered the shift from simple debit card offerings to more complex financial products, including savings accounts, overdrafts, and wealth management.
• Klarna, traditionally known for its Buy Now, Pay Later (BNPL) services, has transformed into a full-service neobank with a global retail payments network, including card offerings, merchant services, and interest-bearing loans.
• SoFi and LendingClub have taken a different route by acquiring banks. SoFi’s acquisition of Golden Pacific Bank allowed the company to offer more traditional banking products like loans and deposits, while LendingClub merged with Radius Bank, enabling it to provide a full suite of regulated financial services.

These strategies allow neobanks to earn revenue from a broader array of sources, including subscriptions, loans, investment products, and merchant services. This shift is crucial for addressing the pressures of interchange fee caps and the costs of building a sustainable digital-first business.

Klarna’s Expansion: Moving Toward a Global Neobank

Klarna, once known for its BNPL services, has shifted its focus to becoming a fully integrated neobank. With its recent earnings report for Q3 2025, Klarna highlighted the success of its growing product suite, which now includes merchant fees, interest income, and card economics via the Klarna Card. CEO Sebastian Siemiatkowski emphasized the company’s ambition to give customers more control over their finances while offering data-rich experiences that build trust.

Klarna’s expansion into global retail payments, alongside fair financing and price comparison services, positions the company at the intersection of payments, credit, banking, and commerce. This strategy enables Klarna to capture a wider range of customer spending behavior, generating recurring revenue from multiple channels.

SoFi’s Hybrid Model: Bank Ownership for Sustainability

Unlike many of its peers, SoFi has chosen a different path by acquiring a bank, which provides it with the ability to hold deposits, issue loans, and earn net interest income. This acquisition of Golden Pacific Bank gives SoFi a regulatory foundation, allowing it to operate much like a traditional bank while still offering digital-first services like checking accounts and payments.

SoFi’s deposit-led funding model enables the company to generate stable income from loans and investments while lowering the costs associated with customer acquisition and funding. In Q3 2025, SoFi reported nearly $20 billion in annualized transaction volume from its payments and checking products, highlighting the success of its integrated approach.

LendingClub: Acquiring a Bank to Strengthen Its Model

Similarly, LendingClub has taken the route of acquiring Radius Bank, providing it with a fully regulated structure that allows it to hold deposits and fund loans internally. This acquisition stabilizes LendingClub’s revenue, reducing its reliance on external loan buyers and enabling it to offer more consistent financial products. LendingClub’s LevelUp savings product has already garnered $3 billion in deposits, signaling the bank’s growing strength in the digital-first financial space.

The Road Ahead: Neobanks Are Building Full-Service Digital Banking Platforms

As neobanks continue to evolve, their ability to offer a full range of products will become increasingly important in maintaining customer loyalty and generating sustainable revenue. The shift from simple debit cards and fee-free accounts to a broader suite of banking services is now a central theme for companies like Monzo, Revolut, Klarna, SoFi, and LendingClub.

Neobanks are no longer just standalone payments apps; they are increasingly becoming modern, digital-first banking platforms that integrate payments, lending, savings, and investment services. This transition is not optional—it is structural, and it is critical for their survival in a competitive, highly regulated financial industry.

Conclusion: The Future of Neobanks

Neobanks are transitioning from simple digital banking platforms into full-service financial institutions. By expanding beyond interchange and offering diverse products like loans, savings, investment services, and merchant services, these digital-first banks are positioning themselves for long-term sustainability and growth in an increasingly competitive and regulated financial landscape.

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