Digital banks exceed 800 million customers globally and pressure traditional banks' margins

The total number of digital bank customers worldwide surpassed the 800 million threshold during 2026, in an unprecedented leap that established these emerging institutions as a true competitive force disrupting the standing of traditional banks.

Brazil leads this wave through Nubank, which crossed 100 million customers in Latin America alone, while Revolut, Starling, and N26 Bank are rapidly consolidating their European presence, as Gulf digital banks such as Neoi and STC Pay compete in Arab region markets.

In response to this expansion, industry reports noted that major traditional banks injected more than $300 billion into digital transformation projects over the past three years, intensifying their programs to develop mobile applications and streamline customer experience.

However, second-quarter earnings reports revealed that digital banks still struggle to achieve sustainable profitability on a large scale, as they bear high customer acquisition costs and grow in a competitive environment that exerts pressure on net interest margins, known as Net Interest Margin (NIM).

What do these terms mean?

Digital Banks (Neobanks): Banking institutions that operate exclusively via the internet and mobile phones without physical branches, offering their services with low operational costs and simple user interfaces — such as Revolut and Nubank.

Net Interest Margin (NIM): The difference between the yield a bank receives from loans and the interest it pays on deposits — it is the key measure of profitability for core banking business.

Customer Acquisition Cost (CAC): How much a company spends on average to acquire a new customer, including advertising, incentives, and discounts — the lower this cost, the more efficient the business model.