In today’s scenario, with everything becoming digital, even the banking industry is getting inclined towards having things done digitally. Those days are gone where the company’s operating models used to concentrate on profits and rightfully delivering their products. Now the companies are concerned with enhancing customer experience. The banking business is also changing rapidly with the financial aspect of India shifting towards providing an enhanced customer experience. The banking business is trying to make changes in their traditional models and offers to fit in the market. With the change of type of customers, their demands and also the services they prefer changes. One such change that the banking industry saw was introducing Neobanks.
Neobank is basically for the new generation customers who prefer everything being done digitally. Neo bank is a type of direct bank that shields financial service providers that cater to modern technology friendly customers. Neobanks can also be said as fintech firms that provide digital and mobile-first financial solutions. Neobanks cater to customer’s need such as transferring money, receiving money, getting credits, paying loans, etc. features in a mobile app. This fintech solution so far can generate a large amount of global market revenue along with helping other firms go digital.
As previously alluded, neobanks have a different business model than traditional banks which is innovative and technology-oriented. Neobanks uses data to arrive at a decision-making process. It uses many data collection and analytical algorithms to understand their customer behavior and cater according. As the complete idea is tech-led, customer behavior analysis is easily handled.
Neobanks not only make things digital but also helps customers friendly. Imagine opening an account by the traditional banking method? Although the processes in banks are much simplified and easy, it cannot give the comfort of doing things on a mobile app while sitting in the luxury of your home, office, or even a mall. All the documents needed to open an account are to be uploaded online and in one or two working days your account is ready to go. It is also reliable for travelers or people who are needed to frequently travel to different countries with neobank’s international cards.
Moreover, people can track the complete process on the same mobile app to ensure the end-to-end success of the transaction. Even the details of the transaction are sorted for future reference, so the consumer can review it when needed making it handy and organized. Most neobanks support dashboard solutions with highly enhanced interfaces and easily understanding the insights for services such as payments, payables and receivables, and bank statements. Consumers do not have to travel for their day-to-day transactions which makes it cost-efficient.
Neobanks helps its customers to keep in pace with the gig economy. Many startups and freelancers use neobank platform to connect with their customers. The major factors that help the gig economy grow are increasing adoption of P2P sharing, increasing digitization rates with high smartphone penetration, and the rising cost of living. Emerging markets are expected to represent a greater portion of the global gig economy with their growing digital banking access and smartphone penetration in developing markets across Asia.
Not only the customers are benefited, but the organization is also a great profit as everything is digitally handled. Neobanks don’t require many physical offices to serve their customers. Some neobanks do offer personalized services but it is still cost-efficient compared to traditional banks and also more widespread.
Neobanks is now becoming one of the most used fintech solutions providing niche solutions targeting blue-collared professionals with measures that help to tackle the challenges of banking and other financial services.