The banking industry is undergoing great transformation by making the best use of new technologies. Technology has benefitting not only the banking sector but also the consumers. One big effect of this change is the emergence of neobanks. Neobanks operate completely online and have no physical branch for themselves. However, many people confuse net banking with neobanking considering the fact that both are online banking.
Let us take a closer look at the features, similarities and differences between net banking and neobanking.
Also Read: Neobanks for students: The benefits
What are Neobanks?
Neobanks functions like any other usual bank, but they operate purely online and do not have any physical bank branch. You can access the bank through their app or can use a smartphone or an internet-based device to enjoy the benefits. You can use this digital bank not only for parking your money but also for borrowing money and availing of various financial products.
In India, the Reserve Bank of India does not allow 100% digital banks. Thus, neobanks need to partner with one or more traditional banks for their functioning. This easy and convenient form of banking is attracting the younger generation more as they are more comfortable and willing to embrace the digital world of banking.
An apt example of neobank in India is NuCash.money . NuCash aims to make banking simple and user-friendly for college students. The online banking system offers a savings account, credit cards, and instant personal loans for students. Instant personal loans from NuCash come with a transparent small monthly fee attached. Users can therefore, enjoy the benefits without getting in the trap of any hidden fees or escalating interest rates.
What is Net Banking?
Digitalization and technology advancements are changing the face of the banking ecosystem the world over. Most of the traditional banks are now gradually moving towards net banking, also called internet banking or online banking. All you need is an internet connection to access your bank account or carry out financial transactions through their website or app. All that the user needs is a smartphone, tablet, or computer.
With the availability of a range of banking services and products on the online platform, you do not need to visit the bank branches. This makes banking easy, convenient and less time-consuming.
Is Net Banking the same as Neobanking?
To make the banking experience even more convenient and quick, now there are neobanks in the market. To be able to make informed decisions and make the most of your money, it is important to be aware of various banking means available in the market.
Many traditional banks are now having a digital presence as well. However, that does not qualifies them to be called a neobank. Thus, net banking is not the same as neobanking.
Net banking is not exclusive to digital banking. For your online transactions, you might mention your physical bank branch code and at some point in time. Or, you might be required to visit the branch
And if for some reason you are not able to use the online banking service, you always have the option of visiting the bank branch to use various banking services. However, in the case of neobanking, there is no such option because they do not have any bank branch.
To make things simpler, you do not have anything like a checkbook with app-based neobanks because the entire banking solutions are available only in the online form.
Also Read: Finance 101 for Students
What are the Advantages of Neobanking?
Neobanks offer a plethora of features that are not available with traditional banks. Let us take a look at the advantages associated with digital banking.
Low cost: Neobanks get to save the costs that go into the maintenance and running of physical branches. This saving reflects in their lower fees and competitive rates for various financial products.
Time-saving: You can access the bank anytime and from anywhere. You get to save your time by not visiting the branch. All transactions are easily done through user-friendly apps. This makes the entire experience quick and easy.
Customer-focused: Neobanks do not have to divert their attention and energy in maintaining a bank branch. Neobanks maximise the resources available by offering more personalized and tailor-made services to the user. Apps are upgraded to give the user a better experience. Neobanks also provide instant approvals for loans. If needed, you can also avail yourself of financial guidance through their apps and knowledge resources.
Also Read: What Is Credit Score And How To Check It
Q. What can you use net banking for?
The user can use Net banking for various purposes like transfer funds, track account statements, pay bills. You can also apply for loans, pay loan installments and insurance premiums and get new debit cards and checkbooks.
Q. What is a net banking account?
A net banking account is the online account of your bank account. To operate this digital version of your account, you need to have a user ID and passwords.
Q. What is an IFSC?
IFSC stands for Indian Financial System Code. It is issued by the RBI to every branch of a legal bank. While making online fund transfer, it is mandatory to mention the IFSC of the branch where you are transferring the money. The code also is mentioned on every cheque leaf of the cheque book.
Q. How safe is the money deposited in a neobank?
Yes, the money deposited in a neobank account is secure. In India, these banks have tied up with traditional banks which provide the underlying account to the customers.
Q. During an emergency, can I access my money deposited in a neobank account?
Yes, you can easily access your money deposited in a neobank account during an emergency. Neobank customers can easily withdraw money from ATMs. They can also transfer funds in India and abroad 24X7 through the mobile app. For instance, you can access your NuCash account round the clock through our mobile app at your own convenience.
Q. Do neobanks have enough customer support to redress their customers’ grievances?
Yes, you can get customer support from a neobank in various ways. You can contact them through phone, online chat, email, WhatsApp, or in-app chat.