Research: More than half of the industry believes challenger banks won’t be competitive with commercial banks
- Tearsheet asked professionals what they thought of challenger banks.
- 57.2 percent of respondents believe challenger banks are overhyped.

A big chunk of financial and fintech industry insiders don't see challenger banks as making a big dent in incumbent consumer banking. And when it comes to commercial banking, professionals are less impressed.
More than half of the industry insiders polled by Tearsheet don't think challenger banks offerings will be competitive with incumbent commercial banks within 3 to 10 years.
Interestingly, Tearsheet asked 172 financial and fintech industry professionals to rank challenger banks in order of their competitiveness to commercial banks on a scale from 1 to 5, with 5 being the highest. While no individual upstart bank scored higher than 2.18 (Revolut, Azlo and Novo), respondents believe challenger banks are more competitive as a whole over a ten year period (2.36). That may point to an expectation that there will be new players entering the field.
Revolut
Common to many challenger banks, Revolut uses a freemium business model in which it gives a way a free, basic checking account and charges for extras. One of the premium offerings of the UK-based startup is a business account. Revolut continues to roll out new functionality for its business customers, like an expense management tool, making it the highest ranking challenger bank by survey respondents.
N26
N26 is one of the largest challenger banks in terms of users. Like Revolut, it also uses a freemium model. Targeting freelancers, the Berlin-based challenger gives business account holders a Mastercard debit card and some cash back on its usage. Its business offering isn't rated as highly as some of the other challenger banks in the space.
Monzo
Monzo is moving slowly into offering a full-blown business account as it tests things out. The company said it intends to introduce a business account that's more attuned to its customer base's needs, rather than just launch a generic type of account. Without a full release, Monzo ranked as the weakest competitor for business banking among challengers (1.64 over three years and 1.82 over ten).
Monese
Having surpassed the 1 million customer mark earlier in 2019, Monese is working on improving its business accounts. The company partnered with iwoca to offer credit to businesses that qualify. Monese ranked in the middle of the pack as part of Tearsheet's survey on competitiveness for commercial banking business.
Azlo
Unlike Revolut, Monzo, Monese, and N26, Azlo doesn't offer a consumer banking option. With a focus on business accounts, the BBVA-owned challenger bank offers FDIC-backed accounts, financial management tools, and free payments using BBVA infrastructure. Azlo is rated one of the top challengers by survey respondents.
Novo
Novo is also a challenger solely focused on business customers. Novo has been rolling out integrations with many of the popular technology platforms used by SMBs in the U.S. Novo offers no-fee accounts and perks and was also ranked highly by Tearsheet's research panel.
Axos
Axos Bank promotes its own brand as well as functioning as a sponsor bank for other digital offerings. N26's US bank brand was built on top of Axos, for example. Axos has its own federal banking charter and offers small business savings and checking accounts, loans, as well as personal accounts. It doesn't rank particularly high in our survey.