Challenger banks are the single biggest segment among the fastest growing fintech startups, CB Insights reported Tuesday.

According to the latest CB Insights’ State of Fintech Funding report, digital-only challenger banks raised $649 million across 17 deals in the second quarter of 2019. Year-to-date funding for challenger banks reached $2.5 billion, surpassing 2018’s record of $2.3 billion, the report noted. Collectively, challenger banks have picked up more than 30 million customer accounts, with notable examples Nubank at 12 million, SoFi at 7.5 million and Revolut at 6 million.

According to Lindsay Davis, senior intelligence analyst at CB Insights, a key trend to watch is the growth of challenger banks in emerging markets. A major player is Brazil-based Nubank, which in July raised $400 million in a new funding round led by U.S. investment firm TCV.

“Outside of North America, the challenger bank movement was really fueled by open banking regulations in Europe, and it’s been spreading [to other markets,]” Davis said. “In emerging markets, people who have not had access to banking services are now getting access because of the penetration of mobile and high-speed internet technology.” In addition, digital banking is no longer the sole domain of financial services companies as large tech players like Uber and Grab begin to roll out financial products, she noted.

Interest in the challenger bank model is a longer play, according to investors queried by Bank Innovation. Jillian Williams, investment principal at Anthemis Group, recently told Bank Innovation that while challengers’ market share is obviously small compared to larger banks, their ability to acquire customers — particularly those underserved by big banks — will make some of them good candidates for future acquisitions.

And while they may not be a major threat to incumbent institutions right now, as more customers turn to digital-only banks for their primary customer relationships, the more big banks will start paying attention to them, noted David Sica, partner at Nyca Partners. “Over time, they will start taking [market] share,” he said in a recent interview. “I think the companies that started with a point solution and demonstrated they could acquire customers, then further acquired customers at scale, are more interesting than the ones that haven’t quite cracked the customer acquisition code yet.”

Alongside the rise in challenger bank funding, overall global fintech funding in the second quarter of 2019 stood at $8.3 billion, up 19% quarter over quarter, while the number venture-backed deals fell to a 10-quarter low at 367.