Chime was the most downloaded US mobile banking app in 2021, with 12.8 million downloads, up 16% from 2020. Other neobanks had a huge year as well: Current posted 67% growth in downloads, and Varo skyrocketed to 10th place with a 529% increase. That said, traditional banks took the rest of the top five positions.

Walmart, Target, and Best Buy executives look ahead: Their comments at a retail industry conference offer insight into where and how they expect consumers to shop.

Current led the category by supporting three of six tools, while Chime and Aspiration tied for second with two features each. Account management features, which cover banking basics, were the best supported in our study. Neobanks offered at least four of the category’s seven tools, while the majority also supported the three most popular ones. Chime and Current prevailed with 77 points each.

Broad-market challengers like Chime and Current, which have offerings designed to assist people who need help with their short-term liquidity needs. Retailers with banking arms could also benefit from added data. Walmart said that Hazel, a fintech it’s backing, will cater to underserved people. Hazel will jump into neobanking and change its name to ONE.

But fast-growing neobanks like Chime and Varo are now successfully targeting these populations, likely at the expense of prepaid cards: Digital-only bank account holder penetration will nearly double between 2021 and 2025, while in-store prepaid card user penetration will stagnate in the coming years, per our forecasts.

Paper is still integral for the money flow: Two studies highlight the need for banking players—particularly neobanks—to continue supporting access to cash and paper checks.

In this section, we’ll dive into the strengths, weaknesses, and long-term risks for each of the four largest neobanks in the US by account holders, as of May 2021: Chime, Current, Aspiration, and Varo. Chime. Chime is the neobank to beat. Founded in 2012, Chime boasts 13.1 million US users.

Walmart’s backing poses a big threat to US challengers like Chime, Revolut, and Varo that lack their own big investor. Walmart’s scale, branding, and level of brand trust also make ONE a formidable foe to big incumbents like Bank of America and JPMorgan Chase.

Chime raised $750 million in August and got a $25 billion valuation. The US-based neobank's strong user growth and a recovering economy underpinned a bullish case for the valuation, while customer relationships and dependence on interchange fees outline the bearish case for it. UK-based Monzo got $475 million in a December round tied to a $4.5 billion valuation.

Popular US challengers like Chime and Current seek to pick off disillusioned incumbent customers by using limited exposure to fees as a key selling point. For example, Current has likely passed up over $100 million in overdraft charges, but has seen its user base skyrocket in recent years.

Applying for an account with Chime, the largest US neobank, for example, took us under 2 minutes—about half the time of some incumbents. Other points of friction that digital challengers bypass include diverting online applicants to a call center.

US-based Chime landed $750 million and got a $25 billion valuation in August 2021. UK-based Starling capped off a £322 million ($412.9 million) round in April 2021, with a pre-money valuation of £1.1 billion ($1.41 billion). France-based Lydia became a unicorn by crossing the $1 billion valuation mark due to a $100 million raise this week.

For example, Chime employs a predictive personalization system that delivers content to customers tailored to their individual financial interests.

Incumbent banks have been making changes to their overdraft approaches—even as neobanks like Chime and Varo have long promoted customers’ limited exposure to fees as a selling point. What comes next? To make up its lost revenue, Capital One can choose from among several options, based on reports from Raddon and Capco:. Adding income via premium offerings.

The recall affecting 817,143 cars—which includes all Tesla Model 3, Model Y, and some Model S and Model X vehicles made in 2021 and 2022—pertains to a signal that does not chime when seatbelts are unbuckled. The recall affecting 53,822 vehicles pertains to cars with the Full Self-Driving feature, which has a setting that lets cars roll through stop signs when they should fully stop.

Neobanks, the digital disruptors of the fintech world, will see the number of US account holders reach 20.2 million by the end of 2021, more than double the number just two years ago, according to our inaugural Insider Intelligence forecast for digital-only banks. Neobank Chime, which was founded in 2013, is well ahead of its competitors. It will hold steady as the industry leader, but there will be a shift this year for the No. 2 spot.

Chime to drop “bank” from its promo items: The neobank reached a settlement with a California regulator that took action against it for not having a license—but the ordeal may spur more challengers to acquire banking charters as a way to build trust with customers.

Google’s update to Google Pay includes enhancements to its Google Plex bank account—as big tech companies dive into banking, it jeopardizes the value proposition of digital-only banks like Chime and Varo.