Neobanks would undoubtedly be the next fintech boom that’ll take India by storm. Financial literacy is crucial, especially if taught at a young age. That’s where the Neobanks come in.
Neobank wave started in India about five years ago. A Neobank is a wholly digital bank that does not have any branches or physical presence.
Neo banks are usually referred to as Direct banks, these banks are 100% digital and simply accessible. Neobank customers can transact on their mobile phones, tablets, laptops and PCs.
Neobanks in the country are aiming to solve what incumbent banks could not provide for. they have concentrated their efforts on providing an excellent user experience and style along side simplifying banking for everybody .
Neobanks are usually to be vocal about their “digital” principles as opposed to the traditional banks. The aim of neobanks is to main aim is ease money management with new age tools and help their customers forge better financial habits.
What are Neobanks?
Neobanks are the institutions that provides saving bank account, a prepaid debit card and other payment services without the traditional brick-and-mortar building.
Neobanks’ work on the mobile-first banking experience path and have moved away from the traditional banking experience.
These digital banks offer services savings account, deposits, payments, UPI, in app budgeting tools and real-time digital receipts for the transactions.
You can open a current business account in lesser time compared to traditional banks. Along side that, an excellent payment gateway, choice to perform bulk payouts, integrated and automatic accounting etc. Overall for a startup looking at saving cost, time and effort spent in manual reconciliation and accounting, this is the perfect solution.
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How do Neobanks work?
Neo banking is the new wave that has taken fintech industry by storm. These banks despite having any physical presence provide a quality, digital banking experience through apps.
The way neo banks work is, they usually partner with one or multiple traditional banks and use their banking infrastructure to provide a diverse range of services to the customers, for instance, quick and simple account opening or easy access to credit, and so on.
Neobank – Pros
1. There is a Low cost structure: no monthly fees, no withdrawal costs and low reloading fees.
2. They are basically large ATM networks with no fees.
3. No overdraft fees because the checking product is a prepaid, reloadable debit card.
4. Simple and engaging mobile experience, unlike banking on a phone with a traditional bank.
5. Intuitive budgeting and money-tracking tools that allow you to determine whether or not you should buy an item.
6. They show real-time balances: The balance on your smartphone is the exact amount of money you have available.
7. Neo banks are all about offering an outstanding customer experience. This also means that you don’t have to worry about a mobile application that isn’t very responsive.
The Neobanks have a narrow range of product offerings, so don’t expect car loans, home mortgages or business services
Also, you won’t be able to open Individual retirement accounts, or IRAs, or apply for credit cards.
The Neobanks offer a Personalised Customer Experience: Easy account creation, 24/7 customer service supported by chatbots, near real-time cross-border payments, and artificial intelligence (AI) and machine learning (ML)-enabled automated accounting, budgeting and treasury services.
• API integration for the banking and accounting and payment infrastructure
• Intergrated Dashboard: This will allow a user to look at payments, payables and receivables, and bank statements. This acts as an efficient tool for expenses, productivity and revenue management.
• Millennials, micro, small and medium enterprises (MSMEs), and those having freelancing-like incomes and earnings fid it very easy to track all the expenses and income on a single platform.
What is the whole noise of about the Neobanks ?
With mobile in the hand of every second person tech industry is booming over the last decade. We all have witnessed a massive change in the finance industry. Be it paying bills or making payments online it’s all a click away.
Consumers are moving from traditional physical banks and carrying hard cash to online baking and wallets.
Neobanks provide its customers the fluidity that traditional banks don’t. Consumer no longer feels the need to stand in long queues to merely print their passbook. Therefore, neobanks are able to easily sustain themselves and turn out to be fruitful.
Also read: 5 myths busted about Neo Banks
How to open an account in a Neobank?
You can open a Neobank account within comfort of your home. This without making several visits to a particular bank’s branch,
All you have to do is download the app, register yourself. Then Fill and submit the application form along with the documents online, get the KYC verified on video to open a bank account in a simple and hassle-free manner.
Also, the biggest advantage with Neobanks is that you can maintain a zero balance in your account.
Difference between a Traditional Bank and a Neobank
Priori to the mobile revolution we all remember standing in queues for everything in a bank.
Visiting a bank used to be nothing less than a nightmare. For every small thing you would need to visit a branch.
Neo Bank provide a full package of bank services remotely. You can carry out any banking operation at any distance from the bank via mobile phone or laptop. To sum up, it works on the system of a real bank, but without a branch.
It is an online-only service. Any neo bank doesn’t have physical offices or branches and interacts with the clients solely via remote tools such as phone, SMS, email, and so on.
The users can access their bank 24/7 from the comfort of their home or any other place in the world. As a rule, such banks do not provide a full range of banking services. Most often, they come up with a few niche products.
At the same time, their services are much more convenient and better than similar offers of traditional banks.