Deposit Fueled Growth in European Neobanks

Higher rates turned the strongest neobanks from payment apps into real spread businesses. Once policy rates moved up, every extra pound or euro of customer cash started earning meaningful yield on the balance sheet, so revenue could grow faster than card spending. That is why deposits mattered more than interchange or subscriptions in 2023. The banks that already had licenses, customer trust, and large balances were able to reprice savings, pull in more deposits, and keep a wide margin between what they earned and what they paid out.

• Revolut is the cleanest example of the mix shift. In 2023, interest income jumped to $621M from $102M, while paid plans grew more steadily and card fees remained a smaller driver. The underlying engine was bigger deposits plus much higher central bank rates.
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• Monzo shows how deposit growth feeds the loop. Customer deposits rose 88% to £11.2B in FY2024, and later disclosures show interest became more than half of revenue, with 28% coming specifically from deposits. A high savings rate is not just a marketing perk, it is a way to gather cheap funding and monetize balances.
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• The same pattern held across peers, but balance sheet depth changed the upside. Starling ended FY2024 with nearly £11.0B of deposits and reported net interest income as a major earnings driver, while N26 said deposits passed €10B in 2024 and interest revenue reached roughly half of total revenue. Bigger average balances gave Starling an especially strong tailwind.
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Going forward, the winners in European neobanking will be the ones that turn deposits into a durable multi product relationship. As rates normalize, easy treasury income will matter less, so the best banks will use those balances to cross sell lending, wealth, and business banking, while keeping deposits sticky enough that margin stays attractive even in a lower rate world.