Neo Banking

The 21st century is all about gadgets and gizmos. The advent of the digital revolution and technological changes have transformed everything.

Several industries’ working was disrupted, and those who failed to adapt were left behind.

Technology and finance are both extensive worlds with obscure concepts.

On merging the two, it seems that something unpredictable awaits you at every turn.

The introduction of financial technology, commonly called ‘FinTech’, refers to innovation and technology towards challenging traditional methods used in the financial services industry.

Although it seems simple enough, ‘fintech’ is an umbrella term, covering a vast number of services that are changing in the new digital era.

These range from mobile payments, digital payments, banking and insurance, to cryptocurrency, blockchain etc.

The fintech landscape includes big tech companies and established financial institutions, as well as the trailblazing young start-ups that are challenging the dominance of both.

One major aspect that connects them all is a willingness to overhaul traditional systems and processes, making things cheaper, faster and more efficient.

Many will use artificial intelligence and machine learning to help in effective customer needs with laser focus.

In the banking arena, the fintech revolution is well underway. Many new technologies (like contactless payments, digital wallets, etc) have become such a big part of our daily routines that it would be difficult to imagine life without them.

‘NeoBank’ is a catch-all term for the new wave of app-based digital banks that have entered the scene in recent years.

Banks have been around forever. In India, the history of banking dates way back to 1750 BC.

We have traditionally been dependent on banks for all of our financial needs, as individuals as well as businesses.

Banks have offered us everything that we have required – from current or savings accounts to credit cards, various types of loans and also, insurance and investment plans. But with fintech startups, the dependency on traditional banks for these services is gradually decreasing, especially for businesses.

These new-age banking services providers are commonly known as neobanks.

They are using technology to unbundle traditional banks. “Neobank” has become somewhat of a buzzword in the fintech space.

These neobanks are often associated as being a part of the ‘Gig Economy’. The gig economy is ruled by one agenda- “Be your own boss!”

Banking has moved forward in leaps and bounds in the past few years.

The way businesses and individuals consume financial services has changed significantly ever since neobanking, API banking, and open banking became prominent in 2016.

These are technology-driven smart banks that offer their services online and via mobile apps.

In other words, they don’t expect you to go to some branch and stand in queues to open an

account or transfer funds. And while most neo banks don’t have a banking license, they provide

the same services by partnering with a traditional bank. ‘All to push the limits of how

much a bank can do for you.’

The idea is to attract a growing customer base by prioritizing 3 things — unrivalled customer experience, well-designed and intuitive interface and a range of unique functionalities.

It’s no secret that traditional banks are on the front of increased competition from many arcs of the digital world.

Neobanks are expanding rapidly, using state-of-the-art tech to win over customers, who demand simpler, faster, and more efficient financial services.

In recent years, neobanks have become the next big thing in fintech.

Fintech startups all over the world, especially in banking and financial services have over 15 million consumers, out of which, over 50% of the consumers are acquired by neobanks.

The incredible growth opportunity for NeoBanking platforms is sprouted by their low-cost business model, which has resulted in high adoption by small and medium-sized enterprises, as well as businesses with variable incomes and earnings, and businesses that embrace innovative tech. The speed of neobank adoption has intrigued investors, corporates, as well as venture capitalists all over the world.

Neobanks are and will be an integral part of the progressive payments and financial solutions in digital India and will be the fastest collaborator with the evolved banking system, with the focus on digital payments and digital way of doing business.

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