It's been two years of economic uncertainty and record-low funding, but US challenger banks seem to have found a way through.
In 2022, they collectively had 39 million customers — around 19% of American adults. Fast forward to 2024, and the customer base of Chime alone — the largest US challenger bank — has grown from 14.5 million to 22.3 million.
Other challengers have also strengthened their positions. Case in point, Varo, at risk of running out of money at the end of 2022, is on track to turn a profit.
And, several newcomers have had successful launches, with the number of digital banks in the North American market standing at 74 as of January 2024, according to Statista.
These numbers are great news for the industry. But they also mean competition is tighter than ever. So which challengers are best-placed to lead the way? And who is falling behind?