NEOBANKS AND THEIR IMPACT ON THE FUNCTIONING OF TRADITIONAL BANKS

This article examines neobanks and the consequences of their impact on the functioning of traditional banks. It has been established that the banking industry is undergoing a fundamental transformation led by innovative digital institutions known as neobanks. It is noted that in the initial stages of development, neobanks faced a number of challenges caused by general economic uncertainty. The fact that the number of neobanks is significantly increasing and the popularity of digital banking services is rising has been confirmed. The dominance of the corporate segment in the neobanking market can be explained by the growing demand for optimized financial services among businesses. At the same time, in the future, the personal segment is expected to experience the fastest growth in the neobanking market. It is projected that global penetration of neobanking service users will reach 4.82% in 2028, with the total number of users amounting to 386.30 million people. A comparative analysis of key characteristics of neobanks that operated or continue to operate in Ukraine (Monobank, Sportbank, Todobank, O.Bank, Neobank, Izibank, and Bank Vlasnyi Rakhunok) has been conducted. The positive trend in financial technology development is illustrated by the steady growth in the number of newly created neobanks over the past two decades. It is noted that competition from neobanks has prompted traditional banks to make more aggressive investments in their online and mobile banking platforms to achieve or surpass the convenience, speed, and functionality offered by neobanks. This dynamic can be viewed as a relevant indicator of profound transformations in the traditional banking system, driven by the need to adapt to digital challenges and changes in financial services consumer behavior. It is concluded that the emergence of neobanks represents a transformational shift in the global financial landscape, challenging the traditional banking model and introducing an era of customer-oriented digital banking. As neobanks and traditional banks adapt to this new landscape, consumers will benefit from a wider range of services, more personalized financial solutions, and greater control over their financial lives.