Neobank is the innovation of the fintech industry. We see every day a new player on the market who has a primary intention is to simplify financial services to a greater extent. Let’s understand what it truly means.
Have you ever thought of a bank, that have no physical branches? No, I am not talking about mobile banking or internet banking. I hope now you can guess it. Yes, I am talking about Neobank.
So, let’s discuss Neobank –
What is Neobank?
A neobank is a digital bank without having any physical branches. Neobanking is entirely online. It’s a wide umbrella of financial service providers who serve today’s tech-savvy customers. Neobanks do not have a bank license of their own but partnership with the bank provide them bank license for service.
Financial institutes are shifting towards customer experience and satisfaction. But a gap might have developed from what the traditional banks offer to what customers expect. And here is Neobanks are making an attempt to fill that gap.
Most traditional banks are stick to legacy-based infrastructure. So, they do not entertain when it comes to aiding SMEs with financial services. Like providing a payment gateway, an invoicing software, quick loan disbursement, hassle-free account opening and more
But Neobank does all the things which traditional banks are not able or willing to do by digitally.
In recent years, Customers are moving away from physical banks and physical cash to more towards online banking and wallets. Currently, more and more people are getting comfortable making online payments through Google Pay, Paytm, PhonePe, and more. Neobanks provide the flow that traditional banks don’t.
These banks offer you hassle-free and 24/7 facilities. They also give you personalised offerings according to your income or spending habits. Most of the Neobanks offer a relatively lower cost structure, while traditional banks offering higher deposit rates.
Advantages of Neobank:
- User-friendly interface
Neobanks provides an excellent customer experience. This means you don’t have to work through a mobile app that is not very responsive. Neobank apps are very smooth and user-friendly. The apps are highly responsive and well-designed to ease customer experience. The ease of use feature makes the app such a hit amongst its customers.
- Automated services
Neobanks offer automated and near real-time accounting and reconciliation services for bookkeeping, balance sheets, profit and loss statements and taxation services such as GST-compliant invoicing, tax payments record keeping and reconciliation, on the mobile platform.
- Hassle-free account creation
When we open a bank account in a traditional bank we need to go through a lengthy process. This lengthy process is completely eliminated while creating an account with a Neobank.
Neobanks don’t have physical branches as we discussed earlier. So, you don’t have to go anywhere to create a bank account. You can do it in a couple of simple steps, at staying wherever you are by your phone. your account will ready in just a couple of minutes.
- Seamless international payments
From the traditional banks, we get a debit card. But all the debit cards cannot be used anywhere in the world, or transact internationally. You may have to make a request for up-gradation and then finally have an international debit card.
But if You have an account in a neobank, yon don’t have to worry about any of that. You can use your card to transact while you’re abroad, with current exchange rates.
- Smart reporting
Transactions made via neobanks are immediately shown on the App. Provides you with an up-to-date balance on your account, at all times. All of your transactions and payments appear on your app. The App also provides you with an overview of your expenses, along with a savings goal which can be customized according to your best-suited needs. This helps you to manage your finances in an organized manner.