Ireland’s domestic banking sector is undergoing a revolution. As traditional banks consolidate their market share, digital-first global players, known as neobanks, are moving swiftly to address the structural gaps left behind. They are stepping in and meeting surging demand from Irish customers and businesses for faster, more accessible and more innovative financial services.
In recent months, Goldman Sachs entered preliminary discussions with Irish regulators about bringing its online retail bank, Marcus, to Irish shores.
Bunq, now Europe’s second-largest consumer neobank, has expanded its footprint significantly. Revolut is preparing to enter the Irish mortgage market, with a soft launch scheduled for later this year.
Monzo, the UK’s largest fintech, has invested in its Irish subsidiary as well. Avant Money, which is already operating as a consumer lender, has upgraded its status to a fully licensed Irish bank under Spain’s Bankinter.
READ MORE
These developments point to a growing international consensus in banking circles that Ireland is fertile ground for a digital banking revolution. The vacuum has emerged because our traditional banks, hobbled by legacy systems, higher cost bases and regulatory inertia, have been slow to adapt.
They have struggled to keep pace with evolving customer expectations, offering clunky, compliance experiences for consumers.
Customers increasingly expect seamless, mobile-first experiences with real-time features, easy account opening and intuitive budgeting tools – services that neobanks provide as standard. For small to medium-sized enterprises (SMEs), the situation can be even more acute.
Underpinning all of this is a cultural divide that sees traditional banks often weighed down by legacy financial and technology infrastructure, as well as risk-averse mindsets. Neobanks, on the other side of the cultural divide, are unburdened by old infrastructure and are engineered for speed, simplicity and scale.
The exit of Ulster Bank and KBC from the Irish market in 2023 left over one million personal and business customers needing new banking solutions. That withdrawal triggered a wave of account switching, but it also triggered something deeper – a re-evaluation of what customers and SMEs actually want from their banking experience.
Incumbents, still traumatised by the financial crisis, focused on cost-cutting and risk containment. Neobanks, however, saw potential in creating customer-centric, mobile-first, everyday engagement products that deliver value quickly and transparently.
This isn’t just a matter of user interface design or trendy branding; neobanks are structurally different.
With no expensive branch networks, lower operating costs and cloud-native infrastructure, they can deliver services at scale with unprecedented speed. Features like instant account creation, real-time spending notifications, budgeting tools and multicurrency functionality are now expected by the majority of customers.
These are absolute banking essentials for any 20-something Gen Z up to 40-something millennials.
The Irish market is particularly receptive to this disruption. With a young, digitally literate population, we have the demographic foundations ripe for neobank adoption.
Meanwhile, SMEs – the backbone of the economy – have long voiced frustration with the lack of flexibility and innovation in business banking. Waiting days for a payment to settle or jumping through hoops to open an account no longer cuts it in a world where companies expect the same seamless experience they enjoy in their personal digital lives.
While neobanks are now targeting mortgages and deposits, they didn’t start by replicating traditional banking models. Instead, they entered through the cracks by offering specific everyday engagement products that addressed overlooked needs.
They offered products that younger customers need and want. These weren’t just gimmick products, they were strategic wedges into markets where the traditional banks had either underinvested or withdrawn completely.
Digital payments platforms, like my own company CleverCards, are part of this neo-finance wave. By enabling businesses to instantly issue and manage digital Mastercards that can be spent anywhere online or in-store using mobile wallets, we too bypass the limitations of traditional banking rails.
There are no delays, no paperwork and no hidden fees. Just speed, control and transparency, which are qualities traditional banks have struggled to deliver at scale.
This is not to say the traditional banks lack talent or intent. Many are working hard to digitise. But they are playing catch-up, often hindered by decades-old IT infrastructure, complex organisational structures and a regulatory environment that favours caution over innovation.
For years, their competitive advantage was trust and stability. In today’s digital age, trust in financial services isn’t just about the name above the local branch door. It is increasingly built on the ability to offer choice, security and real-time value, which is why established traditional banks that already command trust are best placed to deepen it by embracing modern tech platforms.
Meanwhile, global fintechs are moving aggressively. They are well-capitalised, emboldened by digital banking licences across the EU and able to scale into new markets rapidly.
Ireland, with its EU rights and reputation for financial services excellence, is a natural beachhead for European expansion. But more importantly, it is a visibly underserved market, especially for younger customers who want more control and visibility over their money, and businesses that want more efficient ways to pay, reward and manage spending.
The question facing Ireland’s financial system is not whether neobanks will grow here – they already are. The question is whether traditional banks can meaningfully compete with this new wave of digital-first challengers.
Or will they, as in the UK and parts of continental Europe, cede ever more ground to the neobanks who are redefining what the future of banking looks like?
What matters isn’t whether a financial provider is a bank in the conventional sense, but whether it can solve real problems in smarter, faster, more flexible ways that the customer demands.
Kealan Lennon is chief executive and founder of CleverCards
